SEC
RULE 15c2-11
17
C.F.R. § 240.15c2-11 (1990)
(a) It shall be a fraudulent,
manipulative, and deceptive practice within the meaning of section 15(c)(2) of
the Act, 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:
(1) The issuer 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, and such broker or dealer
has in his records a copy of the prospectus specified by section 10(a) of the
Securities Act of 1933;
(2) The issuer has filed a
notification under Regulation A under the Securities Act of 1933 which became
effective 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, and such broker or dealer has in his
records a copy of such offering circular; or
(3)(i) The issuer is required to
file reports pursuant to section 13 or 15(d) of the Act, or is the issuer of a
security covered by section 12(g)(2)(B) or (G) of the Act, and
(ii) The broker or dealer has a
reasonable basis for believing that the issuer is current in filing the reports
required to be filed at regular intervals pursuant to section 13 or 15(d) of
the Act, or, in the case of insurance companies exempted from section 12(g) of
the Act by section 12(g)(2)(G) thereof, the annual statement referred to in
section 12(g)(2)(G)(i) of the Act; and
(iii) The broker or dealer has in
his records the issuer's most recent annual report filed pursuant to section 13
or 15(d) of the Act, or the annual statement in the case of an insurance
company not subject to section 12(g) of the Act, together with any other
reports required to be filed at regular intervals under such provisions of the
Act which have been filed by the issuer after such annual report or annual
statement; or
(4)(i) The issuer is exempt from
section 12(g) of the Act by reason of compliance with the provisions of Sec.
240.12g3-2(b), and
(ii) The broker or dealer wishing to
submit for publication a quotation for such security has in his records, and
makes reasonably available upon request to any person expressing an interest in
a proposed transaction in the security with such broker or dealer, the
information furnished to the Commission pursuant to Sec. 240.12g3-2(b) since
the beginning of the issuer's last fiscal year, which the broker or dealer has
no reasonable basis for believing is not true and correct and which was
obtained by him from sources that he has a reasonable basis for believing are
reliable; or
(5) Such broker or dealer has in his
records, and shall make reasonably available upon request to any person
expressing an interest in a proposed transaction in the security with such
broker or dealer, the following information (which shall be reasonably current
in relation to the day the quotation is submitted), which he has no reasonable
basis for believing is not true and correct or reasonably current, and which
was obtained by him from sources which he has a reasonable basis for believing
are reliable: (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 subparagraph, such delivery, unless otherwise
represented, shall not constitute a representation by such broker or dealer
that such information is true and correct, 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 he has no
reasonable basis for believing the information is not true and correct, and
that the information was obtained from sources which he 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 maintain in his records
information regarding all circumstances involved in the submission or
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 transaction provided to the broker or dealer by such person or
persons.
(c) The broker or dealer shall
maintain in writing as part of his records the information described in
paragraphs (a) and (b) of this section, and any other information (including
adverse information) regarding the issuer which comes to his knowledge or
possession before the publication of submission of the quotation, and preserve
such records for the periods specified in Sec. 240.17a‑4.
(d) 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 inter‑dealer quotation system (as
defined in paragraph (e)(1) of this section), in such form as such system shall
prescribe, at least 2 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.
(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) "Interdealer 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 an
interdealer quotation system sponsored and governed by the rules of a
registered securities association, and such authorization is not suspended,
terminated or prohibited.
(g) The requirement in paragraph
(a)(5) of this section 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 paragraph (a)(5) of this section 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
section.