FINRA proposes to amend Rule 5130 (Restrictions on the Purchase and Sale of Initial Equity Public Offerings) and Rule 5131 (New Issue Allocations and Distributions), which are known as the spinning and withholding rules and which were adopted after the dotcom bust.
The proposed rule change would exempt additional categories of persons from the restrictions of the rules–for example, the proposed rule change would incorporate the definition of "family member" and "family client" under the Investment Advisers Act of 1940 into the definition of "family investment vehicle" under Rule 5130; exclude sovereign entities that own broker-dealer from the categories of restricted persons under FINRA Rule 5130; exempt foreign employee retirement benefits plans that meet specified conditions from the FINRA Rules 5130 and 5131; provide alternative conditions for satisfying the foreign investment company exemption under FINRA Rule 5130; and exclude offerings that are conducted pursuant to Regulation S under the Securities Act from the definition of "New Issue" in FINRA Rules 5130 and 5131. See proposed amendments here.
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