On March 16th, the SEC proposed amendments to update Exchange Act Rule 15c2-11, a rule that regulates certain information gathering and review requirements that brokers and dealers that publish quotations for, or maintain a continuous quoted market in, securities in the over-the-counter (OTC) market. Adopted in 1971, Rule 15c2-11’s framework was designed to prevent certain manipulative and fraudulent trading schemes in the OTC equity markets
Should the proposed amendments be adopted, they would:
- update Rule 15c2-11 to refer only to equity securities
- replace the term “security” in Rule 15c2-11 with the term “equity security,” as defined in Rule 3a11-1
- continue to apply Rule 15c2-11 to brokers and dealers initiating (or resuming) any quotation for an over-the-counter (OTC) security in a quotation medium, to gather and review specified information regarding the security and its issuer
- clarify regulatory obligations when brokers or dealers publish quotations
For more information, please see the Publication or Submission of Quotations Without Specified Information rule proposal on the SEC’s site.
The public may submit feedback during the comment period for the proposal, which will remain open for 60 days following its publication in the Federal Register.
Sources:
SEC Proposes Amendments to Exchange Act Rule 15c2-11 (sec.gov)
Proposed Rule (sec.gov)
