What is required when a person or company accumulates ownership of 10% or more of the voting shares in a federally incorporated company?

What is required when a person or company accumulates ownership of 10% or more of the voting shares in a federally incorporated company?

• A. They must seek government approval
• B. They must issue a press release announcing the ownership
• C. They must notify current shareholders only
• D. They must conduct a shareholder meeting

Answer: (B)

When a person or company accumulates ownership of 10% or more of the voting shares in a federally incorporated company, it is essential for them to issue a press release announcing their ownership. This requirement is tied to the regulations governing public companies, which aim to maintain transparency in the marketplace. By informing the public through a press release, the company ensures that all stakeholders, including current and potential investors, are aware of significant changes in share ownership that could influence the stock's market value and overall corporate governance.

Issuing a press release serves multiple functions: it promotes transparency, allows for informed decisions by current and potential investors, and helps maintain fairness in trading practices. This requirement is crucial for protecting the interests of shareholders and the integrity of the financial markets.