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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Published In: Administrative Agency Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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