What is the Corporate Financing Committee

The Corporate Financing Committee is a FINRA advisory committee that provides feedback on rule proposals and is made up of member firm representatives. The committee advises the Financial Industry Regulatory Authority on regulatory and public policy issues arising from the capital-raising activities of member firms, including their investment banking services. These services include underwriting terms and arrangements in public offerings, private placements, distribution of securities of other member firms and affiliates and a variety of other activities.

Breaking Down Corporate Financing Committee

The Corporate Financing Committee also advises FINRA on a variety of offerings, such as corporate equities, debt, real estate investment trusts (REITs), closed-end investment companies, and direct participation programs (DPP). It may also weigh in on a variety of issues that arise from the research activities of FINRA member firms.

Corporate Financing Committee: FINRA Oversight

The Corporate Financing Committee is one of 15 FINRA advisory committees that consider rule proposals and provide feedback on them, as well as examine and consider regulatory initiatives and various industry issues. According to FINRA, more than 160 industry members and 35 members from outside the industry serve on these committees. The advisory committees meet typically between two and five times a year either in-person or via teleconference.

Corporate Financing Committee vs. Corporate Financing Department

FINRA's Corporate Financing Committee, which provides advice, may be confused with FINRA's Corporate Financing Department, which helps FINRA-regulated firms comply with FINRA rules and federal securities laws by reviewing documents related to capital-raising activities and arrangements. Such efforts serve to protect investors and issuers by regulating underwriting terms and arrangements, as well as addressing conflicts of interest when underwriters have an affiliation with an issuer or are recipients of large portions of the proceeds in a securities offering. 

FINRA's Corporate Financing Department provides two main services: the review of public offerings and the review of private placements. Its public offering review process complements the Securities and Exchange Commission’s registration process for issuers. It provides guidance on what are fair and reasonable underwriting arrangements. The Corporate Financing Committee's private placement review program provides additional regulatory oversight when firms participate in the offerings of unregistered securities to individual investors.

The Corporate Financing Department also provides general annual statistics on the number of regulatory filings submitted for issuers accessing the public or private capital markets. In 2017, it saw 979 public offering filings (914 'corporate filings' including equity and debt, and 65 'other filings' including REITs and DPPs), and 2,579 private placement filings.