The Financial Industry Regulatory Authority has requested comments on a proposed rule set for limited corporate financing brokers (LCFBs). LCFBs are firms that engage in certain limited activities, such as advising companies and private equity funds with regard to one or more of the following: raising capital, corporate restructuring, selecting an investment banker, preparing offering materials, fairness opinions and qualifying or soliciting institutional investors. To reflect the limited activities of LCFBs, the proposed rule set is narrower than the rules for traditional broker dealers and applies exclusively to LCFBs. Under FINRA’s proposal, LCFBs may not maintain customer accounts, hold customers’ securities, accept orders, exercise investment discretion or engage in proprietary trading or market-making activities. FINRA has requested comments on (i) whether the proposed rule set sufficiently protects LCFB customers, (ii) whether additional activities other than those listed above should be permitted and (iii) the economic impact of the proposed rules. The comment period ends on April 28, 2014. 

The Proposed Rules are available here. 

FINRA’s notice to members is available here.