4.1.4.4. Non-Members and Suspended Members
Underwriters may not include in a syndicate or selling group any U.S. firm that is not a FINRA member. However, foreign firms that are not eligible for FINRA membership may be included in a syndicate. No selling concessions may go to a bank or trust.
Nor may underwriters include in a syndicate or selling group any firm that is suspended from FINRA membership. If an underwriter becomes a suspended firm during the distribution of the securities, that firm may no longer receive the securities at a discounted price. Instead, it may only receive the securities at the public offering price.
Member firms must sell new issues (IPOs) and mutual funds to the public at their public offering price. No discounted sales can be made to non-FINRA members. This also means that all offers must be made at the security’s stated price and a firm cannot hold “sales” on securities. This also means you can’t promise a discount to a customer for being a good customer.
A non-member broke