Rule 313. Submission of Partnership Articles—Submission of Corporate Documents
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(a) All partnership articles and all amendments thereto shall be submitted and be acceptable to the Exchange prior to becoming effective.
(b) The charter or certificate of incorporation and all amendments thereto, the by-laws and all amendments thereto, forms of stock certificates and any and all agreements or other documents and amendments thereto relating to the business or affairs of the member corporation between a member corporation and any of its stockholders or between any of the members, principal executives or approved persons of a member corporation other than agreements relating to ordinary securities and commodities transactions shall be submitted to and be acceptable to the Exchange prior to becoming effective.
(c) Any prospectus or other offering circular prepared by a member corporation and used in connection with the offering of any security issued by it shall, prior to such use, be submitted by such corporation to the Exchange.
(d) Reserved.
(e) Each member corporation shall, at such times as may be required by the Exchange, submit to the Exchange through its chief executive officer a certified list of its members, principal executives and approved persons showing to the best of his knowledge and belief the number of shares of each class of stock of such corporation held of record or beneficially or both by each such party.
(f) Each member corporation shall, through its chief executive officer, submit to the Exchange at such times as the Exchange may require an affidavit listing to the best of his knowledge and belief the name of each party directly or indirectly beneficially owning 1% or more of the outstanding voting stock of such member corporation and showing the percentage of such ownership.
| Amendments. March 26, 1970. December 16, 1971. August 9, 1976. Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008. Amended by SR-FINRA-2008-067 eff. Feb. 8, 2010. Selected Notices: 08-64, 09-71. |
• • • Supplementary Material: --------------
Information Regarding Partnership Articles
.10 Submission of partnership agreements
Drafts of partnership articles or of changes in partnership articles proposed to be entered into in connection with the formation of a firm or the admission of a new partner should be submitted to Regulation & Surveillance at least one week in advance of the date on which the application will be acted upon by the Board of Directors. Drafts of other changes to be made in partnership articles should be submitted in advance of their effective date.
The Exchange requires that a signed, photostatic or conformed copy of all partnership articles, including any amendments and supplements thereto, as executed, be filed with the Exchange.
(See ¶2311 for procedure to be followed regarding approval of partners and partnerships.)
Drafts of partnership articles or of changes in partnership articles proposed to be entered into in connection with the formation of a firm or the admission of a new partner should be submitted to Regulation & Surveillance at least one week in advance of the date on which the application will be acted upon by the Board of Directors. Drafts of other changes to be made in partnership articles should be submitted in advance of their effective date.
The Exchange requires that a signed, photostatic or conformed copy of all partnership articles, including any amendments and supplements thereto, as executed, be filed with the Exchange.
(See ¶2311 for procedure to be followed regarding approval of partners and partnerships.)
.11 Withdrawal of capital
The partnership articles of each member firm shall contain provisions that without the prior written approval of the Exchange the capital contribution of any partner may not be withdrawn on less than six months' written notice of withdrawal given no sooner than six months after such contribution was first made. Each member firm shall promptly notify the Exchange of the receipt of any notice of withdrawal of any part of a partner's capital contribution or if any withdrawal is not made because prohibited under the provisions of Securities and Exchange Commission Rule 15c3-1 (see 15c3-1(e)).
The partnership articles of each member firm shall contain provisions that without the prior written approval of the Exchange the capital contribution of any partner may not be withdrawn on less than six months' written notice of withdrawal given no sooner than six months after such contribution was first made. Each member firm shall promptly notify the Exchange of the receipt of any notice of withdrawal of any part of a partner's capital contribution or if any withdrawal is not made because prohibited under the provisions of Securities and Exchange Commission Rule 15c3-1 (see 15c3-1(e)).
| Adopted. July 15, 1971. Amendments. January 20, 1972. October 16, 1975; effective January 1, 1976. |
.12 Deceased Partner's Interest in Continuing Firm
I. The Exchange cannot, upon a partner's death, regard his interest as continuing to be part of the net capital of the continuing or successor firm unless the partnership articles of the firm contain specific and legally adequate provisions to the effect that the claim of the personal representative of a deceased partner to the partner's interest in the firm shall be subordinated to the claims of all present or future creditors of the continuing firm (or any successor firm) arising out of matters occurring subsequent to the partner's death.
If it is the desire and intent of the partners of any firm that the interest of a deceased partner shall be considered, without interruption after his death, as a part of the capital of the continuing or successor firm for a specified period, the partnership articles should effectively provide in substance:
If it is the desire and intent of the partners of any firm that the interest of a deceased partner shall be considered, without interruption after his death, as a part of the capital of the continuing or successor firm for a specified period, the partnership articles should effectively provide in substance:
(1) That the payment of the deceased partner's interest in the firm to his estate can be deferred for a stated period; and
(2) that until such payment, the interest of the deceased partner shall remain at the risk of the business of the continuing or successor firm and shall be considered as capital of such firm in the same manner and to the same extent as capital contributed by a limited partner; and
(3) that any claim of the personal representative of the deceased partner to such interest shall be subordinated in right of payment and subject to the prior payment or provision for payment in full of claims of all present and future creditors of the continuing firm (or successor firm) arising out of any matters occurring before the end of the stated period.
II. If it is the desire of the partners to have a deceased partner's capital continued for a stated period immediately following his death, with the option in his personal representative to continue it for a longer period under the provisions of the deceased partner's Will, it is suggested that the stated period in the partnership agreement be made sufficiently long as to permit the conditions discussed below with respect to testamentary provisions to be complied with.
Provisions in a deceased partner's Will (as distinguished from those in a partnership agreement) providing that the personal representative shall or may become a limited partner in the firm or subordinate the claims of the estate to decedent's interest to the claims of firm creditors who become such after the decedent's death, with respect to the Exchange's determination whether or not to allow a deceased partner's capital interest in computing the net capital of the firm will depend on the facts and circumstances of each case as they exist at the time of such determination. However, in no case will such testamentary provisions be considered as effective in connection with the Exchange's computation of net capital unless at least the following conditions are met:
Provisions in a deceased partner's Will (as distinguished from those in a partnership agreement) providing that the personal representative shall or may become a limited partner in the firm or subordinate the claims of the estate to decedent's interest to the claims of firm creditors who become such after the decedent's death, with respect to the Exchange's determination whether or not to allow a deceased partner's capital interest in computing the net capital of the firm will depend on the facts and circumstances of each case as they exist at the time of such determination. However, in no case will such testamentary provisions be considered as effective in connection with the Exchange's computation of net capital unless at least the following conditions are met:
(1) The Will must contain provisions specifically authorizing the personal representative of the deceased partner either to continue the decedent's capital interest in the firm as limited capital, or otherwise to subordinate the estate's claims against the firm to the claims of creditors of the firm.
(2) The Exchange must be furnished with a satisfactory opinion of counsel to the estate, to the effect that (A) the Will is valid and in full force and effect, (B) the named personal representative is duly qualified and is the executor administering the Will, (C) the personal representative is authorized by the Will to make or continue a capital contribution to the firm, (D) if the personal representative is a partner of, or otherwise interested in, the firm, said representative is authorized by the Will to deal with the estate for his own benefit, (E) all claims of present and future creditors and beneficiaries of the Estate and their successors are subordinate to the claims of all present and future creditors of the firm and its successors.
(3) The personal representative of the decedent must have taken appropriate action either to become a limited partner in the firm or to subordinate the capital interest of the deceased partner as indicated above.
III. It is recommended that member firms consult their own counsel with respect to the advisability of incorporating in their partnership articles provisions of the sort discussed in this Section. Any member firm which decides to adopt such provisions should submit the proposed provisions, in draft form, to the Exchange. Such member firm will then be advised whether, upon the adoption of such provisions and in the event of the death of a partner, the Exchange will be in a position to consider his interest in the firm as part of its net capital for the specified period following his death.
| Amendment. October 16, 1975; effective January 1, 1976. |
Information Regarding Member Corporations
.20 Submission by proposed member corporations of certificate of incorporation, by-laws and other corporate documents
Existing corporations shall promptly submit certified copies (to the extent possible) of the documents referred to in Rule 313(b) and corporations to be formed shall submit drafts thereof, prior to the time they become effective, to Regulation & Surveillance. Upon the formation of a corporation or when an amendment to any of such documents becomes effective, a duly certified copy of the certificate of incorporation and by-laws shall be filed with Regulation & Surveillance and signed, photostatic or conformed copies of the other documents shall be so filed.
(See ¶2311 for procedure to be followed regarding approval of corporations.)
There shall also be submitted an opinion of counsel in form and substance satisfactory to the Exchange stating, among other things, that the corporation is duly organized and existing and that its stock is validly issued and outstanding and that the restrictions and provisions required by the Exchange on the transfer, issuance, conversion and redemption of its stock have been made legally effective.
Existing corporations shall promptly submit certified copies (to the extent possible) of the documents referred to in Rule 313(b) and corporations to be formed shall submit drafts thereof, prior to the time they become effective, to Regulation & Surveillance. Upon the formation of a corporation or when an amendment to any of such documents becomes effective, a duly certified copy of the certificate of incorporation and by-laws shall be filed with Regulation & Surveillance and signed, photostatic or conformed copies of the other documents shall be so filed.
(See ¶2311 for procedure to be followed regarding approval of corporations.)
There shall also be submitted an opinion of counsel in form and substance satisfactory to the Exchange stating, among other things, that the corporation is duly organized and existing and that its stock is validly issued and outstanding and that the restrictions and provisions required by the Exchange on the transfer, issuance, conversion and redemption of its stock have been made legally effective.
| Amendment. March 26, 1970. |
(See .23, below, for restrictions on corporations not incorporated under laws of the State of New York.)
.21 Provisions concerning disposition of stock
The certificate of incorporation of a member corporation may contain provisions that the corporation or its stockholders, or both, may have a prior right to purchase the stock of any stockholder upon such terms and conditions as may be specified therein.
The Exchange will expect a member corporation, either through its certificate of incorporation or separate agreements, to be in a position at all times to comply with the provisions of Rule 312(d).
Each stock certificate of a member corporation shall carry on its face a statement of any such provisions or a full summary thereof.
The certificate of incorporation of a member corporation may contain provisions that the corporation or its stockholders, or both, may have a prior right to purchase the stock of any stockholder upon such terms and conditions as may be specified therein.
The Exchange will expect a member corporation, either through its certificate of incorporation or separate agreements, to be in a position at all times to comply with the provisions of Rule 312(d).
Each stock certificate of a member corporation shall carry on its face a statement of any such provisions or a full summary thereof.
| Amendments. March 26, 1970. March 16, 1972. August 9, 1976. April 2, 1979. |
.22 Provisions concerning redemption or conversion
Each certificate of incorporation of a member corporation shall contain provisions authorizing the corporation to redeem or convert to a fixed income security all or any part of the outstanding shares of voting stock of such member corporation owned by any person required to be approved by the Board of Directors of the Exchange as a member or approved person who fails or ceases to be so approved as may be necessary to reduce such party's ownership of voting stock in the member corporation below that level which enables such party to exercise controlling influence over the management or policies of such member corporation.
If the certificate of incorporation of a member corporation subject to Rule 325 provides that a stockholder may compel the redemption of his stock such certificate must provide that without the prior written approval of the Exchange, the redemption may only be effected on a date not less than six months after receipt by the member corporation of a written request for redemption given no sooner than six months after the date of the original issuance of such shares (or any predecessor shares). Each member corporation shall promptly notify the Exchange of the receipt of any request for redemption of any stock or if any redemption is not made because prohibited under the provisions of Securities and Exchange Commission Rule 15c3-1 (See 15c3-1(e)).
Each stock certificate of a member corporation shall carry on its face a statement of the restrictions in SEC Rule 15c3-1(e) relating to the redemption of stock or a full summary thereof.
Each certificate of incorporation of a member corporation shall contain provisions authorizing the corporation to redeem or convert to a fixed income security all or any part of the outstanding shares of voting stock of such member corporation owned by any person required to be approved by the Board of Directors of the Exchange as a member or approved person who fails or ceases to be so approved as may be necessary to reduce such party's ownership of voting stock in the member corporation below that level which enables such party to exercise controlling influence over the management or policies of such member corporation.
If the certificate of incorporation of a member corporation subject to Rule 325 provides that a stockholder may compel the redemption of his stock such certificate must provide that without the prior written approval of the Exchange, the redemption may only be effected on a date not less than six months after receipt by the member corporation of a written request for redemption given no sooner than six months after the date of the original issuance of such shares (or any predecessor shares). Each member corporation shall promptly notify the Exchange of the receipt of any request for redemption of any stock or if any redemption is not made because prohibited under the provisions of Securities and Exchange Commission Rule 15c3-1 (See 15c3-1(e)).
Each stock certificate of a member corporation shall carry on its face a statement of the restrictions in SEC Rule 15c3-1(e) relating to the redemption of stock or a full summary thereof.
| Adopted. March 26, 1970. Amendments. July 15, 1971. January 20, 1972. October 16, 1975; effective January 1, 1976. August 9, 1976. Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008. Selected Notice: 08-64. |
.23 Restrictions on corporations
Corporations not organized under the laws of the State of New York shall effectively subject themselves to the following restrictions and the opinion of counsel submitted to the Exchange at the time the corporation applies for approval as a member corporation shall set forth the extent to which the following restrictions have been made legally effective:
No dividend shall be declared or paid which shall impair the capital of the corporation nor shall any distribution of assets be made to any stockholder unless the value of the assets of the corporation remaining after such payment or distribution is at least equal to the aggregate of its debts and liabilities, including capital.
Corporations not organized under the laws of the State of New York shall effectively subject themselves to the following restrictions and the opinion of counsel submitted to the Exchange at the time the corporation applies for approval as a member corporation shall set forth the extent to which the following restrictions have been made legally effective:
No dividend shall be declared or paid which shall impair the capital of the corporation nor shall any distribution of assets be made to any stockholder unless the value of the assets of the corporation remaining after such payment or distribution is at least equal to the aggregate of its debts and liabilities, including capital.
| Renumbered. March 26, 1970. |