Community Banks and Compliance with FINRA Rule 6490

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As seen in the Ohio Record published by the Ohio Bankers League.

Several privately-held community banks have gotten a nasty surprise this year when they have received a letter from the Financial Industry Regulatory Authority (“FINRA”) imposing fees of $5,000 or more for late filings pursuant to FINRA Rule 6490. Community banks need to be aware that having a broker-dealer create a market in their securities can now result in a privately-held bank or holding company unknowingly becoming subject to FINRA reporting requirements that mimic that of a SEC-registered company.

FINRA Rule 6490

FINRA Rule 6490, which went into effect in September, 2010, codifies the requirements in Securities Exchange Act (“SEA”) Rule 10b-17 for issuers of any class of publicly-traded, non-exchange listed securities quoted on the Over-the-Counter (OTC) markets to provide timely notice to FINRA of the following “Company-Related Actions”...

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