MFA Submits Comment Letter to SEC in Response to its Order Instituting Proceedings to Determine Whether to Approve or Disapprove of FINRA Proposed Rule 5123 on Private Placements

MFA submitted comments to the SEC in response to its order instituting proceedings to determine whether to approve or disapprove of FINRAs proposed Rule 5123. Proposed Rule 5123 would require FINRA members that offer or sell private placements, or participate in the preparation of disclosure documents, to provide disclosures to each investor prior to the sale describing the anticipated use of offering proceeds, and the amount and type of offering expenses and offering compensation. In our letter, we explain that the disclosure required by proposed Rule 5123 would conflict with the statutory scheme for the regulation of offerings by private funds under the federal securities laws, and would impose an unnecessary burden on issuers that would be inconsistent with the findings that the Commission must make under Section 3(f) of the Exchange Act, including whether the proposed Rule would promote efficiency, competition, and capital formation.