Corporate Universe Inc (COUV)

[lesgetrich]

And if the company doesn't need a market maker to process a form 211, why'd they say they did?

The Form 211 no longer requires SEC/FINRA approval. It can be processed and approved by OTC Markets. There's no requirement to wait out any statute of limitations.

The new rules bring OTC stocks more in line with stocks on major exchanges which can resume trading immediately after their 10 day halt.

The link you cited does not apply here. It concerns the SEC's statute of limitations on enforcing "disgorgement actions". From all indications, the SEC halted COUV because of false or misleading claims from the Covid mask company that they had purchased and subsequently sold after the halt. No one at COUV made any unjust profit, which is what disgorgement actions seek to reverse. In any event, there's no requirement related to any statute of limitations. The broker dealer or OTC markets must satisfy themselves via due diligence and supplemental information requirements that the company is no longer subject to further suspension actions. As far as I can tell, how they do so is not defined.

The SEC Has Adopted Final Amendments To Rule 15C2-11; Major Change For OTC Markets Companies

Among other changes to the securities laws, the NDAA amends the Securities Exchange Act of 1934 to codify the SEC’s authority to seek disgorgement from persons who receive unjust enrichment. It also extends to ten years the statute of limitations applicable to disgorgement claims arising from violations of the anti-fraud provisions of the securities laws, including Section 10(b) of the Exchange Act and Section 17(a)(1) of the Securities Act of 1933. But while the new legislation formalizes certain aspects of the SEC’s disgorgement authority, it freezes, and in some cases scales back, the SEC’s ability to seek other remedies...

...As discussed below, although the amended rule continues to require that a broker-dealer have a reasonable basis to believe information is accurate and from a reliable source, the revamped structure itself may help shift the burden back to the broker-dealer, where it belongs, and reduce FINRA’s overlapping merit review. Importantly as discussed, OTC Markets will not be required to submit a Form 211 but rather its determination of compliance with the rules will be self-effectuating, and a broker-dealer relying on OTC Markets review, will also not be required to submit a Form 211 to FINRA. This alone will make a tremendous difference in the process...

... In complying with the information review requirements under Rule 15c2-11, OTC Markets will be subject to the same review, responsibility and record keeping requirements of a broker-dealer and must have reasonably designed written policies and procedures associated with the rule’s compliance. OTC Markets would then “make known” to the public that it has completed a review and that a broker-dealer can quote or resume quoting the securities, and be in compliance with Rule 15c2-11. Likewise, OTC Markets can make a determination that a company qualifies for an exception to the 211 rule requirements and a broker-dealer can rely on that determination.

A broker-dealer can rely on the OTC Markets determination of the availability of the rule or an exception to quote a security without conducting an independent review. Keeping the rule’s current 3 business day requirement, a broker-dealer’s quotation must be published or submitted within three business days after the qualified IDQS (OTC Markets) makes a publicly available determination.

Importantly, the new rule specifically does not require that OTC Markets comply with FINRA Rule 6432 and does not require OTC Markets or broker-dealers relying on OTC Markets’ publicly available determination that an exception applies, to file Forms 211 with FINRA. I believe that the system will evolve such that OTC Markets completes the vast majority of 211 compliance reviews...

...Interestingly, the SEC release specifies that a deep-dive due diligence is not necessary in the absence of red flags and that FINRA, OTC Markets or a broker-dealer can rely solely on the publicly available information, again, unless a red flag is present. Currently, the broker-dealer that submits the majority of Form 211 applications does a complete a deep-dive due diligence, and FINRA then does so as well upon submittal of the application. I suspect that upon implementation of the new rule, OTC Markets itself will complete the vast majority of 15c2-11 rule compliance reviews and broker-dealers will rely on that review rather than submitting a Form 211 application to FINRA and separately complying with the information review requirements.