Tuesday, June 22, 2021 7:42:47 AM
https://www.sec.gov/rules/final/2020/33-10842.pdf
4. Shell Company Exclusion—Rule 15c2-11(f)(3)(i)(B)
The Commission has determined to adopt, with some modification, the proposal to prohibit broker-dealers from relying on the piggyback exception for shell companies. Specifically, under this modified approach, a broker-dealer may rely on the piggyback exception to quote the security of an issuer that the broker-dealer has a reasonable basis under the circumstances for believing is a shell company for the 18 months following the initial priced quotation for an issuer’s security that is published or submitted in an IDQS. This approach will help protect retail investors by preventing such companies, which can be used as vehicles for fraud, from maintaining a quoted market indefinitely, while promoting capital formation by preserving for a time-limited period a cost-effective means for companies to maintain a broker- dealer quoted market. The Commission remains concerned about the potential that a continuously quoted market facilitated by the piggyback exception could be used to entice investors to make an investment decision based on what appears to be an active and independent market when, in fact, the investor may be considering an artificially increased price for the shell company’s security due to inaccurate and misleading promotional information. The Commission, however, is also concerned that a blanket prohibition on broker-dealers’ ability to rely on the piggyback exception for shell companies may negatively impact capital formation opportunities for privately held companies that seek to merge into OTC shell companies (through reverse mergers) as an alternative to an initial public offering (“IPO”). The amended Rule appropriately balances the promotion of investor protection and the facilitation of capital.
Recent GVSI News
- Epazz, Inc. (OTC Pink: EPAZ) US Navy Collaboration ZenaDrone 1000 • InvestorsHub NewsWire • 11/09/2023 01:00:34 PM
- Epazz, Inc. (OTC Pink: EPAZ) US Navy Collaboration ZenaDrone 1000 Extreme Weather Demo • InvestorsHub NewsWire • 11/07/2023 12:29:43 PM
FEATURED Cannabix Technologies and Omega Laboratories Inc. Advance Marijuana Breathalyzer Technology - Dr. Bruce Goldberger to Present at Society of Forensic Toxicologists Conference • Sep 24, 2024 8:50 AM
FEATURED Integrated Ventures, Inc Announces Strategic Partnership For GLP-1 (Semaglutide) Procurement Through MedWell USA, LLC. • Sep 24, 2024 8:45 AM
Avant Technologies Accelerates Creation of AI-Powered Platform to Revolutionize Patient Care • AVAI • Sep 24, 2024 8:00 AM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM