What is SEC 15c211?
Rule 15c2-11 is designed to address fraudulent behavior that is generally associated with trading in stocks in the over-the-counter (OTC) market. The combination of high retail investor participation and sparse information about certain issuers is fertile ground for fraud in this market.
What is a 211 filing?
Pursuant to SEC Rule 15c2-11, a Market Maker must file Form 211 with FINRA. Form 211. Form 211 provides the basic information regarding the company. In order to fully comply with Rule 15c2-11 there are many more items that need to be provided to the Market Maker. There are also some minimums that are important to note.
What is the OTC marketplace?
An over-the-counter (OTC) market is a decentralized market in which market participants trade stocks, commodities, currencies, or other instruments directly between two parties and without a central exchange or broker. This is very different from an auction market system.
What is the expert market OTC?
The Expert Market is available only for unsolicited quotes, meaning broker-dealers may use the Expert Market to publish unsolicited quotes representing limit orders from retail and institutional investors who are not affiliates or insiders of the issuer.
Where do I buy OTC stocks?
Here are the best mobile trading apps for buying OTC stocks:
- Fidelity – $0 per trade.
- TD Ameritrade – $6.95 per OTCBB trade.
- Charles Schwab – $6.95 per OTCBB trade.
- TradeStation – $0 per trade (up to 10,000 shares)
- Interactive Brokers – $. 0035 per share.
Are OTC markets safe?
With the exception of some large foreign firms, investors should generally avoid stocks that trade over-the-counter. Penny stocks – those that trade for low prices, often less than a dollar per share – are dangerous. Call them penny stocks, microcaps or OTC stocks; by any name, they’re bad news.
What is the 15c2-11 application process?
The 15C2-11 application process is similar to a registration process, in that the Issuer provides disclosure information to a market maker who in turns files such information with FINRA who in turn comments on the information and asks additional questions.
What is Rule 15c2-11 of the SEC Form 211?
Rule 15c2-11 requires that the company have current public information available before the market maker can quote the security. The information required in the Form 211 satisfies the current public information requirement of Rule 15c2-11. Form 211 requires, among other things, the following disclosures:
How do I use Rule 15c2-11 when going public?
In order to use Rule 15c2-11 in a going public transaction, the private company must locate a sponsoring market maker to submit the Form 211 application to FINRA on its behalf. FINRA may render comments to the Form 211 application which the sponsoring market maker and private company must respond to.
What is Rule 15c2-11 (FINRA)?
Rule 15c2-11 requires specified disclosures be submitted to the Financial Industry Regulatory Authority (“FINRA”) by the issuer’s sponsoring market maker on Form 211 before initiating quotations of a security.