Rule 15c2-11 -- Initiation or Resumption of Quotations without Specific Information
Preliminary Note:
Brokers and dealers may wish to refer to Securities Exchange Act Release No. 29094 (April 17, 1991), for a discussion
of procedures for gathering and reviewing the information required by this rule and the requirement that a broker or dealer have
a reasonable basis for believing that the information is accurate and obtained from reliable sources.
a.As a means reasonably designed to prevent fraudulent, deceptive, or manipulative acts or practices, it shall be unlawful
for a broker or dealer to publish any quotation for a security or, directly or indirectly, to submit any such quotation for
publication, in any quotation medium (as defined in this section) unless such broker or dealer has in its records the
documents and information required by this paragraph (for purposes of this section, "paragraph (a) information"), and,
based upon a review of the paragraph (a) information together with any other documents and information required by
paragraph (b) of this section, has a reasonable basis under the circumstances for believing that the paragraph (a)
information is accurate in all material respects, and that the sources of the paragraph (a) information are reliable. The
information required pursuant to this paragraph is:
1.A copy of the prospectus specified by Section 10(a) of the Securities Act of 1933 for an issuer that has filed a
registration statement under the Securities Act of 1933, other than a registration statement on Form F-6, which
became effective less than 90 calendar days prior to the day on which such broker or dealer publishes or submits
the quotation to the quotation medium, Provided That such registration statement has not thereafter been the
subject of a stop order which is still in effect when the quotation is published or submitted; or
2.A copy of the offering circular provided for under Regulation A under the Securities Act of 1933 for an issuer that
has filed a notification under Regulation A and was authorized to commence the offering less than 40 calendar
days prior to the day on which such broker or dealer publishes or submits the quotation to the quotation medium,
Provided That the offering circular provided for under Regulation A has not thereafter become the subject of a
suspension order which is still in effect when the quotation is published or submitted; or
3.A copy of the issuer's most recent annual report filed pursuant to Section 13 or 15(d) of the Act or a copy of the
annual statement referred to in Section 12(g)(2)(G)(i) of the Act, in the case of an issuer required to file reports
pursuant to Section 13 or 15(d) of the Act or an issuer of a security covered by Section 12(g)(2)(B) or (G) of the
Act, together with any quarterly and current reports that have been filed under the provisions of the Act by the
issuer after such annual report or annual statement; Provided, however, That until such issuer has filed its first
annual report pursuant to Section 13 or 15(d) of the Act or annual statement referred to in Section 12(g)(2)(G)(i)
of the Act, the broker or dealer has in its records a copy of the prospectus specified by Section 10(a) of the
Securities Act of 1933 included in a registration statement filed by the issuer under the Securities Act of 1933,
other than a registration statement on Form F-6, that became effective within the prior 16 months, or a copy of
any registration statement filed by the issuer under Section 12 of the Act that became effective within the prior 16
months, together with any quarterly and current reports filed thereafter under Section 13 or 15(d) of the Act; and
Provided further, That the broker or dealer has a reasonable basis under the circumstances for believing that the
issuer is current in filing annual, quarterly, and current reports filed pursuant to Section 13 or 15(d) of the Act, or,
in the case of an insurance company exempted from Section 12(g) of the Act by reason of Section 12(g)(2)(G)
thereof, the annual statement referred to in Section 12(g)(2)(G)(i) of the Act; or
4.The information furnished to the Commission pursuant to Rule 12g3-2(b) since the beginning of the issuer's last
fiscal year, in the case of an issuer exempt from Section 12(g) of the Act by reason of compliance with the
provisions of Rule 12g3-2(b), which information the broker or dealer shall make reasonably available upon
request to any person expressing an interest in a proposed transaction in the security with such broker or dealer;
or
5.The following information, which shall be reasonably current in relation to the day the quotation is submitted and
which the broker or dealer shall make reasonably available upon request to any person expressing an interest in a
proposed transaction in the security with such broker or dealer:
i.the exact name of the issuer and its predecessor (if any);
ii.the address of its principal executive offices;
iii.the state of incorporation, if it is a corporation;
iv.the exact title and class of the security;
v.the par or stated value of the security;
vi.the number of shares or total amount of the securities outstanding as of the end of the issuer's most recent
fiscal year;
vii.the name and address of the transfer agent;
viii.the nature of the issuer's business;
ix.the nature of products or services offered;
x.the nature and extent of the issuer's facilities;
xi.the name of the chief executive officer and members of the board of directors;
xii.the issuer's most recent balance sheet and profit and loss and retained earnings statements;
xiii.similar financial information for such part of the 2 preceding fiscal years as the issuer or its predecessor has
been in existence;
xiv.whether the broker or dealer or any associated person is affiliated, directly or indirectly with the issuer;
xv.whether the quotation is being published or submitted on behalf of any other broker or dealer, and, if so,
the name of such broker or dealer; and
xvi.whether the quotation is being submitted or published directly or indirectly on behalf of the issuer, or any
director, officer or any person, directly or indirectly the beneficial owner of more than 10 percent of the
outstanding units or shares of any equity security of the issuer, and, if so, the name of such person, and the
basis for any exemption under the federal securities laws for any sales of such securities on behalf of such
person.
If such information is made available to others upon request pursuant to this paragraph, such delivery,
unless otherwise represented, shall not constitute a representation by such broker or dealer that such
information is accurate, but shall constitute a representation by such broker or dealer that the information is
reasonably current in relation to the day the quotation is submitted, that the broker or dealer has a
reasonable basis under the circumstances for believing the information is accurate in all material respects,
and that the information was obtained from sources which the broker or dealer has a reasonable basis for
believing are reliable. This paragraph (a)(5) shall not apply to any security of an issuer included in
paragraph (a)(3) of this Section unless a report or statement of such issuer described in paragraph (a)(3) of
this Section is not reasonably available to the broker or dealer. A report or statement of an issuer described
in paragraph (a)(3) of this Section shall be "reasonably available" when such report or statement is filed with
the Commission.
b.With respect to any security the quotation of which is within the provisions of this Section, the broker or dealer
submitting or publishing such quotation shall have in its records the following documents and information:
1.A record of the circumstances involved in the submission of publication of such quotation, including the identity of
the person or persons for whom the quotation is being submitted or published and any information regarding the
transactions provided to the broker or dealer by such person or persons;
2.A copy of any trading suspension order issued by the Commission pursuant to Section 12(k) of the Act respecting
any securities of the issuer or its predecessor (if any) during the 12 months preceding the date of the publication or
submission of the quotation, or a copy of the public release issued by the Commission announcing such trading
suspension order; and
3.A copy or a written record of any other material information (including adverse information) regarding the issuer
which comes to the broker's or dealer's knowledge or possession before the publication or submission of the
quotation.
c.The broker or dealer shall preserve the documents and information required under paragraphs (a) and (b) of this Section
for a period of not less than three years, the first two years in an easily accessible place.
d.
1.For any security of an issuer included in paragraph (a)(5) of this Section, the broker or dealer submitting the
quotation shall furnish to the interdealer quotation system (as defined in paragraph (e)(2) of this Section), in such
form as such system shall prescribe, at least 3 business days before the quotation is published or submitted, the
information regarding the security and the issuer which such broker or dealer is required to maintain pursuant to
said paragraph (a)(5) of this Section.
2.For any security of an issuer included in paragraph (a)(3) of this Section,
i.a broker-dealer shall be in compliance with the requirement to obtain current reports filed by the issuer if
the broker-dealer obtains all current reports filed with the Commission by the issuer as of a date up to five
business days in advance of the earlier of the date of submission of the quotation to the quotation medium
and the date of submission of the paragraph (a) information pursuant to Schedule H of the By-Laws of the
National Association of Securities Dealers, Inc.; and
ii.a broker-dealer shall be in compliance with the requirement to obtain the annual, quarterly, and current
reports filed by the issuer, if the broker-dealer has made arrangements to receive all such reports when filed
by the issuer and it has regularly received reports from the issuer on a timely basis, unless the broker-dealer
has a reasonable basis under the circumstances for believing that the issuer has failed to file a required
report or has filed a report but has not sent it to the broker-dealer.
e.For purposes of this Section:
1."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.
2."inter-dealer quotation system" shall mean any system of general circulation to brokers or dealers which regularly
disseminates quotations of identified brokers or dealers.
3.Except as otherwise specified in this rule, "quotation" shall mean any bid or offer at a specified price with respect
to a security, or any indication of interest by a broker or dealer in receiving bids or offers from others for a
security, or any indication by a broker or dealer that he wishes to advertise his general interest in buying or selling
a particular security.
4."Issuer", in the case of quotations for American Depositary Receipts, shall mean the issuer of the deposited shares
represented by such American Depositary Receipts.
f.The provisions of this Section shall not apply to:
1.The publication or submission of a quotation respecting a security admitted to trading on a national securities
exchange and which is traded on such an exchange on the same day as, or on the business day next preceding, the
day the quotation is published or submitted.
2.The publication or submission by a broker or dealer, solely on behalf of a customer (other than a person acting as
or for a dealer), of a quotation that represents the customer's indication of interest and does not involve the
solicitation of the customer's interest; Provided, however, That this paragraph (f)(2) shall not apply to a quotation
consisting of both a bid and an offer, each of which is at a specified price, unless the quotation medium specifically
identifies the quotation as representing such an unsolicited customer interest.
3.
i.The publication or submission, in an interdealer quotation system that specifically identifies as such
unsolicited customer indications of interest of the kind described in paragraph (f)(2) of this Section, of a
quotation respecting a security which has been the subject of quotations (exclusive of any identified
customer interests) in such a system on each of at least 12 days within the previous 30 calendar days, with
no more than 4 business days in succession without a quotation; or
ii.The publication or submission, in an interdealer quotation system that does not so identify any such
unsolicited customer indications of interest, of a quotation respecting a security which has been the subject
of both bid and ask quotations in an interdealer quotation system at specified prices on each of at least 12
days within the previous 30 calendar days, with no more than 4 business days in succession without such a
two-way quotation;
iii.A dealer acting in the capacity of market maker, as defined in Section 3(a)(38) of the Act, that has
published or submitted a quotation respecting a security in an interdealer quotation system and such
quotation has qualified for an exception provided in this paragraph (f)(3), may continue to publish or submit
quotations for such security in the interdealer quotation system without compliance with this Section unless
and until such dealer ceases to submit or publish a quotation or ceases to act in the capacity of market
maker respecting such security.
4.The publication or submission of a quotation respecting a municipal security.
5.The publication or submission of a quotation respecting a security that is authorized for quotation in the NASDAQ
system (as defined in Rule 11Ac1-2(a)(3) of this chapter), and such authorization is not suspended, terminated, or
prohibited.
g.The requirement in subparagraph (a)(5) that the information with respect to the issuer be "reasonably current" will be
presumed to be satisfied, unless the broker or dealer has information to the contrary, if:
1.The balance sheet is as of a date less than 16 months before the publication or submission of the quotation, the
statements of profit and loss and retained earnings are for the 12 months preceding the date of such balance sheet,
and if such balance sheet is not as of a date less than 6 months before the publication or submission of the
quotation, it shall be accompanied by additional statements of profit and loss and retained earnings for the period
from the date of such balance sheet to a date less than 6 months before the publication or submission of the
quotation.
2.Other information regarding the issuer specified in subparagraph (a)(5) is as of a date within 12 months prior to
the publication or submission of the quotation.
h.This Section shall not prohibit any publication or submission of any quotation if the Commission, upon written request or
upon its own motion, exempts such quotation either unconditionally or on specified terms and conditions, as not
constituting a fraudulent, manipulative or deceptive practice comprehended within the purpose of this Rule. |
