Internal approval is not the same as a FINRA notice
An issuer is generally considered to have provided notification when it submits a complete request in the manner and form required by FINRA by the applicable deadline. Board approval, shareholder consent, a state filing, a press release, an OTC Markets update, or a transfer agent instruction does not by itself satisfy Rule 6490.
For an SEA Rule 10b-17 Action, the notice must include the information required by SEC Rule 10b-17 and must be submitted on time. For Other Company-Related Actions, Rule 6490 requires a complete request no later than 10 calendar days before the proposed effective date. A submission that is missing key information or documents may not protect the issuer from late status or deficiency review.
What a complete submission usually includes
A complete Rule 6490 submission will depend on the action, but it often includes the company-related action notification, officer or authorized representative information, the proposed record or effective dates, transfer agent information, corporate approvals, state filings, charter amendments, CUSIP materials, capitalization information, and other supporting documents. When a fee is required, payment or proof of payment must be handled as required by FINRA.
The issuer should also verify that all materials use the same company name, symbol, CUSIP, share amounts, split ratio, par value, record date, payable date, and effective date. Inconsistencies can cause unnecessary comments or a deficiency concern.
Confirmation does not mean approval on the merits
Receiving a case number or electronic confirmation may mean the submission was received for review. It does not necessarily mean that FINRA has processed the action or that the action will appear on the Daily List. FINRA may ask for more information, require additional documents, or identify a deficiency.
Issuers should monitor the submission, respond quickly to requests, and avoid making public statements that imply FINRA approval before processing is complete. Premature announcements can create investor confusion if dates change or if the action is delayed.
Why timing and completeness matter
Rule 6490 gives FINRA authority to review corporate actions to protect investors and promote orderly markets. If FINRA believes the forms or supporting documents may be incomplete, inaccurate, or unauthorized, it may make a deficiency determination. The company may also face issues if it is delinquent in required reports, if persons connected to the issuer have relevant regulatory or fraud-related issues, or if settlement and clearance uncertainty exists.
Before submitting a Rule 6490 notice, issuers should have securities counsel review the entire package for accuracy, completeness, authority, timing, and consistency with public disclosures.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected].
Hamilton & Associates | Securities Attorneys
Brenda Hamilton, Securities Attorney
200 E Palmetto Rd, Suite 103
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com