Yesterday, the new FINRA Rule 2040 became effective. The rule was approved by the SEC earlier this year. Rule 2040(c) requires a broker-dealer who sells EB-5 securities to disclose to investors the amount of fees paid to foreign finders. In addition, a broker-dealer must receive written acknowledgement from an investor which shows that the investor is aware of the fees. A document disclosing the total compensation paid by the issuer to the finder, and each investor’s acknowledgement of the same, must be retained and available for inspection by FINRA. As noted in previous posts, FINRA rules only apply to broker-dealers.