Quick Answer
A member that sells another issuer's private placement files the offering documents with the Financial Industry Regulatory Authority, or notifies it that none were used, within 15 calendar days of the first sale. Separately, paying an unregistered person for bringing in securities business is prohibited.
One scored item, two unrelated risks: a missed clock and a payment to the wrong person.
Which One-Liners Win Points?
- File or notify within 15 calendar days of the date of first sale, not from launch and not from the day the offering document was finalized. Calendar days include weekends and holidays.
- An offering with no memorandum and no written materials still creates a duty. The member must affirmatively say none were used.
- Filings are confidential, used only for regulatory review. Confidentiality never makes a filing optional.
- Fourteen categories are exempt, mostly sales solely to institutional or sophisticated buyers, offerings regulated another way, and offerings already filed elsewhere.
- The member private offering rule applies only when the member or a control entity is the issuer. Another issuer's securities trigger the notice filing instead.
- Paying an unregistered person is judged on substance. A referral, consulting, or marketing label does not cure pay tracking the business that person produced.
- The firm carries an affirmative burden before paying: determine that the recipient needs no registration, support and record that determination, and revisit it while payments continue.
Which Numbers Matter Most?
| Item | Value |
|---|---|
| Filing or notification deadline | 15 calendar days from the date of first sale |
| Exempt categories | 14, a closed list |
| Short-term privately placed debt exemption | 397 days or less, $150,000 denominations |
Which Gotchas Trip Students Up?
Exam Tip: Gotchas
- "Solely" means all or nothing. An offering sold to nine qualified institutional buyers and one retail investor loses the institutional-buyer exemption.
- A filing exemption is not a registration exemption. It relieves the notice filing only.
- An individualized exemption is not automatic like the categorical list. It comes only for good cause shown.
- The member's notice does not substitute for the issuer's own Form D with the Securities and Exchange Commission. Same 15-calendar-day trigger, two regulators, and only Form D's deadline rolls off a weekend.
- Foreign status is required on both sides. A foreign finder bringing in a United States customer does not qualify, and a domestic finder paid for United States business has no exception.
One-Breath Recap
Unless the private placement fits one of fourteen exempt categories, the member selling it files the offering documents with the Financial Industry Regulatory Authority, or notifies it that none were used, within 15 calendar days of first sale. That confidential notice does not replace the issuer's own Form D, and the member private offering rule applies instead when the member or a control entity is the issuer. Separately, paying an unregistered person for the business they bring in is prohibited on substance rather than label, with one narrow exception for a nonregistered foreign finder and foreign customers.
Need more than the recap? Read the full Filing Obligations and Prohibited Compensation unit.