FINRA has broadened the definition of “family investment vehicle” so that more family offices can receive IPO allocations. The amended definition now cross-references the family office definition from the Advisers Act to include all lineal descendants and their spouses as well as family clients including family trusts. The changes to Rule 5130 (IPOs) and 5130 (new issue allocations) also address foreign investment companies, retirement plans, SPACs, and charitable organizations.
This change fixes an anomaly where family offices were treated differently for different regulatory purposes. For broker-dealer compli-pros at firms that deal in IPOs and new issues, it may be worth taking a refresher on the arcane rules.