15c2-11 Filings
What is SEC Rule 15c2-11?
Under Rule 15c2-11, the
Securities Exchange Commission states that it
is unlawful for a U.S. securities broker or dealer to initiate
or resume quotations for any security unless certain information
regarding the issuer is available and the broker or dealer has a
reasonable basis for believing that the information is accurate and
obtained from reliable sources.
What is the Form 211?
The Form 211 is the form
which must be completed and submitted to FINRA
OTC Compliance Unit by a market maker to initiate or resume quotations
in the OTCBB, the "Pink Sheets", or any other comparable quotation
medium pursuant to SEC Rule 15c2-11. (source:
www.otcbb.com)
What information is need for
World Trade to consider quoting a security?
We encourage each
potential issuer to review the questions and request
items found within our 211 Questionnaire
.
It is also
recommended that you consult your legal counsel.
What are some differences
between companies quoted on by an OTC quotation service and companies
listed on a stock market?
Stock markets (including
NASDAQ and the registered exchanges, such as
NYSE or AMEX) have specific quantitative and qualitative listing and
maintenance standards, which are stringently monitored and enforced.
Companies listed on a stock market have reporting obligations to the
market, and an on-going regulatory relationship exists between the
market and its listed companies. OTC quotation services (OTCBB, Pink
Sheets) facilitate quotation of unlisted securities. As such, any
regulatory relationship between an OTC quotation service and the
issuers may be relatively limited or non-existent. (source:
www.otcbb.com)
What are the "listing"
requirements for the OTCBB?
Because the OTCBB is a
quotation service for FINRA Market
Makers, not an issuer listing service or securities market, there are
no listing requirements that must be met by an OTCBB issuer.
Accordingly, there are no financial requirements and there is no
minimum bid price requirement.
(source: www.otcbb.com)
What are the eligibility
requirements for the OTCBB?
In order for a security
to be eligible for quotation by a
market maker on the OTCBB, the security must be registered with the
Securities and Exchange Commission (SEC) or other federal regulatory
authority that has proper jurisdiction (see below) and the issuer must
be current in its required filings with such federal authority.
Domestic issues quoted on the OTCBB are limited to the following
securities:
- securities of issuers that make current filings pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ("Act");
- securities of depository institutions that are not required to make filings under the Act, but file publicly available reports with their appropriate regulatory authorities;
- securities of registered closed-end investment companies; and
- securities of insurance companies that are exempt from registration under Section 12(g)(2)(G) of the Act.
Foreign issues and ADRs
must be registered with the Securities
& Exchange Commission (SEC) pursuant to Section 12 of the
Securities Exchange Act of 1934. (source: www.otcbb.com)
Do financials submitted with the
Form 211 have to be audited?
Yes, the periodic
reporting requirements under NASD Rule
6530 require annual audits of an OTCBB issuer's financial statements.
However, current FINRA rules do not require the financial statements of
Pink Sheet issuers to be audited, but they should be prepared in
accordance with GAAP or, for foreign issuers, in accordance with their
home country's accounting standards. (source: www.otcbb.com)
Are OTCBB company auditors
required to be registered with the Public Company Accounting Oversight
Board (PCAOB)?
Effective October 22,
2003, auditors
of all domestic public companies must be registered with PCAOB. As
specified in Section 102 of the Sarbanes-Oxley Act, it is unlawful for
an auditor of a public company to issue an audit opinion if they are
not registered with PCAOB. Filings with audit opinions of an
unregistered PCAOB auditor are considered to be incomplete and not in
compliance with Rule 6530. (source: www.otcbb.com)
Why don't I get Inside Quote
(Best Bid and Best Ask) Information for all OTCBB securities?
There must be at least
two bid and two ask quotations to
calculate the inside market for a security. Because only one Market
Maker is required on the OTCBB and Market Makers are permitted to post
one-sided quotes and unpriced indications of interest, there may be
securities for which inside quotes can not be calculated.
(source: www.otcbb.com)
You may also be interested in:
OTCBB.com's FAQs
otcMarkets.com's OTC Guide
SEC Rule 15c2-11
FINRA Rule 6530: OTCBB-Eligible Securities
