SEC Rule 15c2-11 definition Serious?
I see this can dump POS to Pinks but.....?
Compliance With SEC Rule 15c2-11 And NASD Marketplace Rule 6740 Following An SEC Trading Suspension
It has come to the attention of NASD Regulation that following recent trading suspensions some members have been entering quotations into quotation mediums without complying with SEC Rule 15c2-11 and NASD Marketplace Rule 6740. The NASD wishes to remind members of their obligations under SEC Rule 15c2-11 and NASD Marketplace Rule 6740 following trading suspensions imposed by the SEC. In particular, members must fully comply with the requirements of those rules before entering quotations into any "quotation medium," including ECN's.
SEC Rule 15c2-11 And NASD Marketplace Rule 6740
SEC Rule 15c2-11 establishes requirements for the publication and submission of quotations for certain over-the-counter securities on a "quotation medium" (as defined below). Unless a member can rely upon an exception to 15c2-111, NASD Marketplace Rule 6740(a) provides that before a member initiates or resumes the quotation of a non-Nasdaq over-the-counter security in any quotation medium, the member must demonstrate compliance with the information maintenance requirements of Rule 15c2-11.
SEC Rule 15c2-11(e)(1) Defines Quotation Medium As Follows:
"Quotation medium" shall mean any "interdealer quotation system" or any publication or electronic communications network or other device which is used by brokers or dealers to make known to others their interest in transactions in any security, including offers to buy or sell at a stated price or otherwise, or invitations of offers to buy or sell. (emphasis added)
Accordingly, ECNs, just like the Over-the-Counter Bulletin Board, "Pink Sheets," and other quotation devices, fall within Rule 15c2-11's definition of "quotation medium" in that they are devices used by brokers or dealers to make known to others their interest in transactions in any security.2
Trading Suspensions
The SEC is authorized by Section 12(k)(1)(A) of the Securities Exchange Act of 1934 to suspend trading in the securities of an issuer for up to 10 business days.3 Members should be aware that after a trading suspension, compliance with SEC Rule 15c2-11 and NASD Marketplace Rule 6740 must be reestablished before entering quotations in any quotation medium.
Questions regarding entering quotations following a trading suspension may be directed to the Legal Section of NASD Regulation's Market Regulation Department at (301) 590-6410.
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1 Securities listed on an exchange, securities quoted on Nasdaq, and municipal securities are exempt from the Rule. 15c2-11(f)(1), (4) and (5). The rule also provides for "piggy back" exemptions for securities which have been the subject of quotations for certain periods of time or for market makers who have continued to publish quotations in the security. 15c2-11(f)(3). The piggy back exemptions are not available immediately following a trading suspension however. Finally, members may also enter unsolicited quotations "solely on behalf of a customer (other than a person acting as or for a dealer)" 15c2-11(f)(2).
2 "t is possible that broker-dealers view Rule 15c2-11 as applying only to quotations published in the OTC Bulletin Board or the Pink Sheets. In fact, the Rule applies to quotations published in any quotation medium." Publication or Submission of Quotations Without Specified Information, Securities and Exchange Commission Release No. 34-39670 (February 17, 1998) (emphasis in original) (release proposing amendments to Rule 15c2-11).
3 Information about SEC trading suspensions is available on the SEC Web Site.
Pennies not a zero sum game as much as some zero game.
