What is the purpose of FINRA rule 5130?

FINRA Rule 5130 is designed to prevent industry insiders from exploiting their position by ensuring that underwriters make a bona fide public offering of new issues. The rule specifically targets the practice of allocating new issue shares to individuals with close ties to underwriters (such as brokers, their family members, or other insiders), thereby promoting fairness and transparency in the public offering process. By mandating that the allocations are made primarily to the investing public, the rule helps to prevent conflicts of interest and ensures that new issues are sold in a manner that benefits a larger segment of investors, rather than a select few.

The other options do not relate to the primary focus of FINRA Rule 5130. Fixed income securities and margin account rates are outside the scope of this particular rule. Additionally, while fees for registered persons are a concern in securities regulation, they are not addressed by this rule. Thus, the emphasis on ensuring a genuine public offering is what makes this answer accurate.