FINRA Manual: Contents
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11-09 New Electronic System for Submitting and Processing Company-Related Actions for Non-Exchange Listed Securities Under Rule 6490; Effective Date: March 14, 2011
Trading and Market Making
Non-Exchange Listed Securities
Referenced Rules & Notices
FINRA Rule 6490
Regulatory Notice 10-38
SEA Rule 10b-17
Beginning March 14, 2011, issuers, American Depositary Receipt (ADR) depositary banks and other parties that provide notice of company-related actions to FINRA under Rule 6490 must use a new electronic system to provide such notice to FINRA. As of this effective date, FINRA will no longer accept paper copies of the Company-Related Action Notification Forms.
The new electronic Company-Related Action Forms will be available on March 14, 2011, via www.finra.org/upc/forms.
The text of FINRA Rule 6490 is available on FINRA's website.
Questions regarding this Notice should be directed to:
Background & Discussion
FINRA Rule 6490 (Processing of Company-Related Actions), which became effective on September 27, 2010,1 codifies the requirements in SEA Rule 10b-17 for issuers of a class of publicly traded over-the-counter (OTC) securities to provide timely notice to FINRA of certain corporate actions (e.g., dividend or other distribution of cash or securities, stock split or reverse split, or a rights or subscription offering). Generally (pursuant to SEA Rule 10b-17), issuers must provide notice at least 10 days prior to the record date for the corporate action. Issuers must also notify FINRA of certain other corporate actions (e.g., the issuance or change of trading symbols, mergers or bankruptcy) no later than 10 days prior to the effective date of the company action.
Issuers must complete the required forms and pay the applicable fees within such time periods or they will be subject to late fees and delayed processing of documents to announce corporate actions.
Under Rule 6490, FINRA's Operations Department has the authority to request other documents that may be necessary to verify information provided on the forms. The Operations Department may, in its discretion, conduct detailed reviews of submissions on a case-by-case basis. Moreover, the rule authorizes FINRA not to process a request to announce a corporate action if it determines that the request is deficient and not processing is necessary for the protection of investors and the public interest, and to maintain fair and orderly markets.
Currently, issuers and other parties submit notifications of company-related actions under Rule 6490 by completing the appropriate Company-Related Action Notification Form from FINRA's website and then submitting a paper copy of it to the Operations Department. On March 14, 2011, issuers and other parties must begin using FINRA's new electronic system to provide these notifications. As of this date, FINRA will no longer accept paper copies of Company-Related Action Notification Forms.
The new system offers enhanced functionality that will give issuers and other parties:
New Steps for Submitting Company-Related Actions
As of March 14, 2011, an issuer or other duly authorized representative that is obligated to provide notice of a company-related action to FINRA must follow these steps:
FINRA believes the new electronic system will make compliance with Rule 6490 more efficient. In addition, issuers and other parties that submit corporate action requests will have expanded payment options under the new system for submission of the required Rule 6490 fees that will allow payment by credit card, PayPal or ACH.
1 See Securities Exchange Act (SEA) Release No. 62434 (July 1, 2010; 75 FR 39603 (July 9, 2010); SR-FINRA-2009-089 (Order Approving Proposed FINRA Rule 6490 (Processing of Company-Related Actions) to Clarify the Scope of FINRA's Authority When Processing Documents Related to Announcements for Company-Related Actions for Non-Exchange Listed Securities and To Implement Fees for Such Services). See also Regulatory Notice 10-38 (Obligation of Issuers to Provide Notice of Company-Related Actions) (August 2010).