What must happen if a broker-dealer intends to promote a new issue?

If a broker-dealer intends to promote a new issue, compliance with FINRA regulations is a critical requirement. FINRA, which stands for the Financial Industry Regulatory Authority, oversees brokerage firms and exchange markets to ensure that the securities industry operates fairly and honestly.

Before promoting a new issue, broker-dealers must adhere to a range of rules and regulations that govern how securities are offered to the public. This includes ensuring the promotional materials are accurate and not misleading, conducting due diligence on the issue, and following the appropriate procedures for marketing the security. Compliance helps protect both the investors and the integrity of the market.

While submitting documentation to the SEC might also be part of the overall process for certain types of offerings, it is not specifically a requirement for promotion activities in every case. Similarly, holding a public meeting or providing annual financial reports may be relevant for specific offerings or ongoing obligations, but they are not universally mandated steps for the promotion process. Therefore, ensuring compliance with FINRA regulations stands out as the primary obligation for broker-dealers when promoting new issues.