UPC Corporate Actions Frequently Asked Questions (FAQ)


Dividends

  1. What rules govern the reporting of dividends; when must a company report a declaration of a dividend or other distribution?
  2. What is an "ex-dividend date"?
  3. How does a company report a dividend?
  4. What is the "record date" for a dividend?
  5. What is the "payable date" for a dividend?
  6. What documentation is required for stock dividends which are 25% or greater than the security value?

 

Other Company Related Actions

  1. What is a "stock split"?
  2. What documents are required for a stock split?
  3. What documents are required for a Company to change its name?
  4. Are there any reasons when an OTC Voluntary Symbol Change will not be granted? Or are there any time restrictions when requesting an OTC Voluntary Symbol Change request?

 

Rule 6490

  1. Where can I find out more information regarding FINRA Rule 6490?
  2. Are all mergers and acquisitions required to be filed under FINRA Rule 6490?
  3. When must an issuer notify FINRA of a filing of dissolution with the state?
  4. What party is responsible for paying all fees?
  5. Which company-related actions require a fee?
  6. When does the 10 calendar day commence in connection with calculation the fee?
  7. If my company is affecting multiple SEA 10b-17 events, are multiple action fees required to be paid?
  8. What are the applicable fees under FINRA Rule 6490?
  9. How do I submit the applicable fee?

Dividends

 

1. What rules govern the reporting of dividends; when must a company report a declaration of a dividend or other distribution?
Please refer to Rule 10b-17 (Untimely Announcements of Record Dates) of the Securities Exchange Act of 1934 ("SEA"), which generally requires an OTC Equity issuer to provide FINRA's Operations Department notice 10 days prior to the record date of the following corporate actions: (1) the issuance of a dividend or other distribution in cash or in kind; (2) a stock split or reverse split; or (3) a rights or other subscription offering.  Failure by an OTC Equity issuer to provide the requisite notice may constitute a violation of Section 10 of the Securities Exchange Act of 1934.
2. What is an "ex-dividend date"?
The date on or after which a security begins trading without the dividend (cash or stock) included in the contract price. Please refer to FINRA Rule 11140  to see how an ex-dividend date is set. See Notice to Members 00-54, Ex-Dividend Dates (August 2000).
3. How does a company report a dividend?
As of March 14, 2011, issuers, 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 date, FINRA no longer accepts paper copies of the Issuer and ADR Company-Related Action Notification Forms. FINRA continues to accept paper copies of the Transfer Agent Verification Form, as it is not a part of the new electronic system. See Regulatory Notice 11-09 for more information.
4. What is the "record date" for a dividend?
The date on which a company's records are closed to determine which stockholders are to be sent dividends, proxies, rights, etc.
5. What is the "payable date" for a dividend?
The date the dividend is sent to the record owner of the security.
6. What documentation is required for stock dividends which are 25% or greater than the security value? 
  • Completed Issuer Company-Related Action Notification Form
  • Completed Transfer Agent Verification Form (PDF 509 KB)
  • Documentation identified on the electronic system when completing the company-related action notification form, e.g.:File stamped articles of incorporation, executed and notarized copy of Board of Directors Resolution authorizing the dividend, or SEC filing equivalent, or notarized and executed offers certificate, or specific state law stating why it is not required

Other Company Related Actions

 

1. What is a "stock split"?
The division of outstanding shares of a corporation into a larger number of shares (forward split) or a smaller number of shares (reverse split). For example: in a 3-for-1 forward split, a holder of 100 shares would receive 300 shares of the post-split security, In a 1-2 reverse split, a holder of 100 shares would receive 50 shares of the post-split security. In both examples, the proportionate equity in the company would remain the same.
2. What documents are required for a stock split?
The company needs to complete the Issuer Company-Related Action Notification Form and submit to FINRA no later than 10 calendar days prior to the record date of the corporate action. Submissions can be set via email or fax to (202) 689-3533. Failure by an OTC Equity issuer to provide the requisite notice may constitute fraud under Section 10 of the Securities Exchange Act of 1934.
3. What documents are required for a Company to change its name?
The company needs to complete the Issuer Company-Related Action Notification Form and submit to FINRA no later than 10 calendar days prior to the record date of the corporate action. Submissions can be set via email or fax to (202) 689-3533. Failure by an OTC Equity issuer to provide the requisite notice may constitute fraud under Section 10 of the Securities Exchange Act of 1934.
4. Are there any reasons when an OTC Voluntary Symbol Change will not be granted?  Or are there any time restrictions when requesting an OTC Voluntary Symbol Change request?
Yes, FINRA will not process a voluntary symbol request if the issuer has either an announced corporate action or a symbol change within the past 60 days. 

Rule 6490

 

1. Where can I find out more information regarding FINRA Rule 6490?
The full text of the rule can be found at www.finra.org/rulefilings/2009-089 or in Regulatory Notice 10-38 at www.finra.org/notices/10-38
2. Are all mergers and acquisitions required to be filed under FINRA Rule 6490?
No, only a merger or acquisition that has a direct impact on the publicly tradable security of a company (e.g., name change, distribution, cancellation of shares) would an issuer be required to notify FINRA.
3. When must an issuer notify FINRA of a filing of dissolution with the state?
If the dissolution involves no distribution or cancellation of shares, we require notification upon filing with the state.  If there is a distribution or cancellation of shares, we require 10 days notification prior to the record date or cancellation date of shares as required by SEA Rule 10-17.
4. What party is responsible for paying all fees?
The requesting party is responsible for paying all fees.
5. Which company-related actions require a fee?
All SEA Rule 10b-17 notifications (any distribution of cash and/or stock), voluntary symbol request changes, and appeals pursuant to FINRA Rule 6490 require a fee.
6. When does the 10 calendar day commence in connection with calculation the fee?
The 10 day calendar commences when the issuer provides all applicable requirements of SEA Rule 10b-17 to FINRA Operations as provided in FINRA Rule 6490.
7. If my company is affecting multiple SEA 10b-17 events, are multiple action fees required to be paid?
Yes.  For example, if a company conducting a reverse split and spin-off that are submitted at the same time with timely notification, the fee would be $400, $200 for each action.  Also, each class of securities affected by a corporate action is subject to all applicable fees.
8. What are the applicable fees under FINRA Rule 6490?
    SEA Rule 10b-17Action     Fee
 Timely SEA Rule 10b-17 Notification $200
 Late SEA Rule 10b-17 Notification  Submitted at least 5 calendar days prior to Corporate Action Date $1,000
 Late SEA Rule 10b-17 Notification  Submitted at least 1 calendar day prior to Corporate Action Date $2,000
 Late SEA Rule 10b-17 Notification Submitted on or after Corporate Action Date $5,000
 Other Company-Related Action Fee
 Voluntary Symbol Request Change $500
 Initial Symbol Set Up No Charge
 Symbol Deletion No Charge
 Appeals Fee
 Action Determination Appeal Fee $4,000 


Please note that the fees above are not inclusive of any bank and/or wire fees. Such bank and/or wire fees are the responsibility of the requesting party and cannot be deducted from any amounts owed pursuant to FINRA Rule 6490. In addition, all fees pursuant to FINRA Rule 6490 must be paid in U.S. Dollars. 

Note: The fee table is provided here for convenience only. Requesting parties should always refer to the fee table in FINRA Rule 6490, which may be amended from time to time, for the most current list of applicable fees.
9. How do I submit the applicable fee?
Applicable fess are submitted through the new electronic system by credit card or ACH.