Proposed Amendments to the

FACT SHEET

Proposed Amendments to the

Rule Governing Information

Reviews for OTC Equity Quotations

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Rule 15c2-11 requires a broker or dealer, before initiating (or resuming) any quotation

for an over-the-counter (OTC) security in a quotation medium, to gather and review

specified information regarding the security and its issuer.

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The proposed amendments would replace the term “security” in Rule 15c2-11 with the

term “equity security,” as defined in Rule 3a11-1.

Why This Matters

In 2020, Rule 15c2-11 was amended to require that specified information be current and

publicly available for brokers and dealers to publish a quotation for, or maintain a

continuous quoted market in, a security in a quotation medium. Following the adoption of

the 2020 amendments to Rule 15c2-11, numerous industry participants stated that they

never understood Rule 15c2-11 to apply to non-equity securities and expressed concerns

with the potential burdens of applying the amended rule to fixed-income securities. After

industry participants shared their concerns regarding Rule 15c2-11’s application, the

Commission provided exemptive relief and the staff issued a no-action letter addressing

the vast majority of fixed-income securities. Accordingly, the Commission is proposing

amendments to Rule 15c2-11 to replace the term “security” with “equity security,” as

defined in Exchange Act Rule 3a11-1.

How This Rule Applies

Under the proposed amendments, Rule 15c2-11 would continue to apply to brokers and

dealers initiating (or resuming) quotations in a quotation medium for any equity security as

defined in Rule 3a11-1. The proposed amendments would not change the substantive

information gathering and review requirements under existing Rule 15c2-11(a).

What’s Next?

The proposing release is published on SEC.gov and will be published in the Federal

Register. The public comment period will remain open for 60 days after the date of

publication in the Federal Register.

U.S. SECURITIES AND EXCHANGE COMMISSION