Tag: 15c2-11

Overview

The disclosure document pursuant to Rule 15c2-11 of the Exchange Act of 1934 that a registered broker/dealer submits to FINRA  for approval to initiate the quotation of an Issuer’s securities on the Over the Counter (OTC) Market.  Upon the publication of the initial quote, trading my be initiated in an Issuer’s securities.  The sponsoring broker/dealer is generally the sole market maker for the 1st 30 days of trading.  This is generally done to allow for an orderly market to develop.

The submission process is governed by FINRA Rule 6432.

Starting October 23rd, 2017, all broker/dealers are required to submit the 15c2-11 information statements electronically through the FINRA portal system.

Companies that are applying for an exchanging listing, NASDAQ or New York Stock Exchange (NYSE) are not required to have a 15c2-11 submitted on their behalf.

Approval Time:

The length of time to receive approval for the initiation of trading can vary greatly.  As a general Rule of Thumb, companies that are listed on Foreign Exchanges are approved in less than two (2) weeks, and the approval of smaller domestic companies can take several months.

Additional Information

Additional information on the 15c2-11 process may be found by referencing Exchange Act Release No. 29094 (April 17, 1991).

New Case Study: Resuming Trading Following a Trading Suspension

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The SEC’s Proposed Changes to Rule 15c2-11

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Gifting of Shares – Do Not Do It !

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FINRA Adopts New Electronic Form 211

FINRA recently published Regulatory Notice 17-26, mandating the use of the electronic Form 211. Beginning on October 23rd, 2017, firms must begin using the electronic Form 211, instead of the current paper submissions. What this does is effectively eliminate the current process of submitting the information required pursuant to SEA Rule 15c2-11 by way of a paper submission.