The Golden Lounge

[janice shell]

This is interesting:

FINRA Is Proposing Rules and Fees for Notices of Corporate Actions
Posted April 15, 2010 5:00PM PST

The Financial Industry Regulatory Authority is proposing rules and fees for processing notifications of corporate actions, in order to combat possible fraud by over-the-counter issuers and penny stock promoters.

The proposed rules and fees, which have been published in the Federal Register and are pending approval by the Securities and Exchange Commission, would establish circumstances where FINRA could decline to process documents related to company actions.

Those actions include dividends or other distributions of cash, stock splits or reverse splits, and rights or other subscription offerings. They also would include the issuance or change of a trading symbol or company name, mergers, acquisitions, dissolutions or other company control transactions, bankruptcies or liquidations.

Until now, FINRA has had only a ministerial function related to notices of company actions. Such notices must be filed with FINRA no later than 10 days prior to the action under SEA Rule 10b-17.

The proposed rules would give FINRA the authority to reject forms it views as deficient for specified reasons.

Forms would be deemed deficient if FINRA staff reasonably believes them to be incomplete, inaccurate or without proper authority; if the issuer is not current in its reporting obligations to the SEC or other regulatory body; or if FINRA has knowledge that parties related to the action are the subjects of regulatory actions, investigations or legal actions related to fraud or securities law violations.

FINRA could also reject forms if it has knowledge indicating that persons related to the company action may be involved in potentially fraudulent activities or that there is uncertainty in the settlement and clearance process for the security.

Under the proposal, FINRA would charge a fee of $200 for an on-time filing request, a late fee of $1,000 for notifications at least five days prior to the corporate action date, a late fee of $2,000 for notifications submitted one day prior to the action and a late fee of $5,000 for notifications submitted after the action date. FINRA would also charge $4,000 for appeals of any rejections of notifications.

Samuel Krieger, an attorney with the law firm of Krieger & Prager in New York, said that the language of the proposed rule appears to be overly broad and would place an unfair burden on issuers.

http://pipes.dealflowmedia.com/wires/article.cfm?title=FINRA-Is-Proposing-Rules-Fees-Notices-Corporate-Actions&id=tbpbykistwepuuo