Day Tradexchange Inc. (SYNJ)

[Dragonwing]

Companies and transfer agents have to notify FINRA of all corporate actions. FINRA then reviews the submission, and if they find it deficient in any of the following five areas, the corporate action will not be processed. It's pretty straightforward. The only ambiguous thing is the "other regulatory authority."

1. FINRA staff reasonably believes the forms and all supporting documentation, in whole or in part, may not be complete, accurate or with proper authority;

2. the issuer is not current in its reporting obligations, if applicable, to the SEC or other regulatory authority;

3. FINRA has actual knowledge that parties related to the Company-Related Action are the subject of pending, adjudicated or settled regulatory action or investigation by a regulatory body, or civil or criminal action related to fraud or securities laws violations;

4. a government authority or regulator has provided information to FINRA, or FINRA has actual knowledge, indicating that persons related to the Company-Related Action may be potentially involved in fraudulent activities related to the securities market and/or pose a threat to public investors; and/or

5. there is significant uncertainty in the settlement and clearance process for the security.


Referral of Possible Non-Compliance with SEA Rule 10b-17 to SEC Staff

Non-compliance with SEA Rule 10b-17 has been an ongoing concern, and FINRA expects the new rule to reduce such non-compliance. An issuer that fails to notify FINRA of a proposed corporate action, as required by SEA Rule 10b-17, is potentially violating an anti-fraud rule of the federal securities laws. The possible sanctions for violating federal securities laws are significant. In addition, transfer agents that knowingly aid and abet such violations may also be subject to possible sanctions. Where FINRA Operations staff has actual knowledge, it will use its best efforts to provide a list of non-complying issuers to the SEC staff.

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p121988.pdf