What is the Corporate Financing Committee?

The Corporate Financing Committee is a FINRA advisory committee that presents feedback and reviews on rule proposals. It is made up of a number of representatives from various firms. This committee has a number of tasks, with the primary one being providing advice to the Financial Industry Regulatory Authority on regulatory and policy matters which arise from processes of capital-raising of its member companies, including their investment banking practices. 

Some of these practices or services include underwriting terms and conditions in public offerings for companies, private placement, proper distribution of securities among other member companies and affiliates, as well as a number of other activities and practices.

What does the Corporate Financing Committee Do?

The Corporate Financing Committee presents the Financial Industry Regulatory Authority on a diverse number of public offerings, like corporate equities, debt instruments, real estate investment trusts (REITs), direct participation program (DPP), and closed-end investment firms. It also covers different matters resulting from some research being carried out by FINRA member companies.

Corporate Financing Committee and FINRA

The Financial Industry Regulatory Authority has a total of 15 advisory committees that examine rule proposals and present reviews and feedback on them, and also analyze and consider diverse industry matters and regulatory initiatives. Of these 15 bodies, the Corporate Financing Committee seems to tackle matters on various offerings more efficiently compared to the others. In a report by FINRA, over 160 industry members and a total of 35 members from outside the industry serve on all 15 committees. Meetings are usually organized at least two to five times per annum either by teleconference, or in-person.

Differences and Similarities Between the Corporate Financing Committee and the Corporate Financing Department

It is important that members of the public know the difference between the FINRA committee which provides financial advices and the one which assists businesses in complying with laid down rules federal securities regulations. The former task is carried out by the Corporate Financing Committee, while the later is the task of the Corporate Financing Department. 

The later helps firms to comply to rules and regulations by reviewing files and documents related to capital-raising activities and terms of agreements. These regulations help a business, or help to protect the interest of investors and issuers by controlling underwriting conditions and arrangement, as well as reviewing conflicts of interests in cases where underwriters are affiliated to issuers or where underwriters are benefactors of large shares of proceeds in a securities public offering. 

The FINRAs Corporate Financing Department offers two primary services: review of public offerings and the review of private placement. The former the public offering review process works as a complement for the Securities and Exchange Commissions registration process for issuers. It also offers detailed guidance on what is regarded as fair and reasonable in an offerings underwriting arrangement or process. 

The Corporate Financing Committees private placement review process offers extra regulatory guidance in cases where companies participate in the offerings of unregistered securities and other corporate instruments to individual investors or private entities. Another task which the Corporate Financing Department is great at doing is providing annual general statistics on the number of successful filings submitted for securities issuers accessing the public or private capital markets.  

As of 2017, the department saw a total of 979 public offering filings. The details of these filings are given as: 914 corporate filings plus equity and debt, and another 65 filings which included REITs and DPPs. They also registered a total of 2,579 private placement filings in the same year.