some info on that
SEC Rule 10b-17 is the main regulation dealing with stock splits. Rule 10b-17 is an anti-fraud regulation of federal securities law. The regulation requires that issuers of publicly traded securities provide timely notice of certain corporate actions, including stock splits, reverse stock splits and the issuance of dividends. The notice must be provided at least 10 days before the record date for the corporate action. The regulation states that the notice must be provided to the National Association of Securities Dealers (NASD). The Financial Industry Regulatory Authority (FINRA) was created when the NASD merged with the New York Stock Exchanges (NYSE) regulation committee in 2007 and is therefore the successor to the NASD.
SEC Rule 10b-17 includes a number of requirements for the notice to be provided, including the record date for determining stockholders who are entitled to the distribution, the date of the payment or distribution, the method of settlement of fractional interests, and additional details relating to stock or reverse splits, among other requirements.
In 2010, FINRA enacted Rule 6490, which codified the notice requirements of SEC Rule 10b-17. FINRA states that issuers must complete the required forms and pay the required fees to avoid late penalties and delayed processing of documents. FINRA is further entitled to request other documentation to verify information on the submitted forms. Rule 6490 authorizes FINRA to not process a request if it determines that the request is deficient, and not processing the request is necessary to protect investors and maintain orderly markets. FINRA may decline to process documentation if it has actual knowledge that persons related to the corporate action to be taken may be involved in securities fraud.
