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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Proposed Rules
All submissions should refer to File Number S72320. This file number should be included on the subject line if email is used. To help us process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commissions internet website https www.sec.gov/rules/
exorders.shtml. Comments are also available for website viewing and printing in the Commissions Public Reference Room, 100 F Street NE, Washington, DC 205491090 on official business days between the hours of 10:00 a.m. and 3:00 p.m. All comments received will be posted without change.
Persons submitting comments are cautioned that the Commission does not redact or edit personal identifying information from comment submissions.
Commenters should submit only information that they wish to make available publicly.
FOR FURTHER INFORMATION CONTACT: John Guidroz, Branch Chief, James Curley, Laura Gold, Theresa Hajost, Patrice Pitts, Special Counsels, Elizabeth Sandoe, Senior Special Counsel, Josephine Tao, Assistant Director, or Mark Wolfe, Associate Director, at 202
5515777, in the Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE, Washington, DC 205491090.
SUPPLEMENTARY INFORMATION:
I. Background
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A. Adoption of Amendments to Rule 15c211
Rule 15c211 specifies key, basic issuer information that must be obtained and reviewed before a broker-dealer may initiate or resume quotations for a security in a market other than a national securities exchange, subject to certain exceptions.1 The Amended Rule becomes effective on December 28, 2020. Except for paragraph b5iM
of the Amended Rule, compliance is required nine months following the effective date, on September 28, 2021
the Compliance Date.2
1 The information review requirement refers to the Amended Rules requirement to obtain and review specified issuer information, and to have a reasonable basis under the circumstances for believing, based on a review of such information, together with any applicable supplemental information also specified under the Amended Rule, that the issuer information is accurate in all material respects and is from reliable sources, before a broker-dealer may publish or submit a quotation to initiate or resume a quoted market in the issuers security.
2 See Publication or Submission of Quotations Without Specified Information, Exchange Act Release No. 89891 Sept. 16, 2020, 85 FR 68124, 68172 Oct. 27, 2020 Adopting Release. The compliance date that is nine months after the
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Under the Amended Rule, certain applicable issuer information must be current and publicly available, as those terms are defined in the Amended Rule,3 for a broker-dealer to initiate or resume a quoted market in the issuers security after complying with the information review requirement.4
Further, with respect to the piggyback exception, which allows a broker-dealer to rely on the quotations of the brokerdealer that initially complied with the information review requirement to maintain continuous quotations for the security in an interdealer quotation system an IDQS, the amendments require that applicable issuer information also must be current and publicly available, timely filed, or filed within 180 calendar days from the end of the issuers most recent fiscal year or any quarterly reporting period that is covered by a report required by Section 13 or 15d of the Exchange Act, as applicable.5 As a result, on the Compliance Date, broker-dealers may not rely on the piggyback exception to maintain a quoted market in the securities of issuers for which information is not current and publicly available.
The Commission received comments on the proposed amendments to Rule effective date of the Rule is referred to herein as the Compliance Date. Between the effective date and the Compliance Date, broker-dealers must comply with the provisions of Rule 15c211 prior to amendment. The compliance date for paragraph b5iM of the Amended Rule is two years after the effective date of the Amended Rule.
3 See Amended Rule 15c211e2 defining the term current, e5 defining the term publicly available.
4 See Amended Rule 15c211a1iB. The Rules recordkeeping requirement is unchanged under the amendments, except broker-dealers no longer have to preserve documents that are available on the Commissions Electronic Data Gathering, Analysis and Retrieval System EDGAR. See Amended Rule 15c211d1iA.
5 See Amended Rule 15c211f3iC requiring an issuers specified information to be, depending on the regulatory status of the issuer, one of the following: 1 Current and publicly available; 2
timely filed i.e., filed by the prescribed due date for a report or statement as required by an Exchange Act or Securities Act of 1933 the Securities Act reporting obligation; or 3 filed within 180
calendar days from a specified period; see also Amended Rule 15c211e3 defining the term interdealer quotation system. For purposes of this proposed exemptive order, these requirements with respect to the piggyback exception are referred to as the requirement to be current and publicly available. The amendments also 1 modify the piggyback exceptions frequency-of-quotation requirement by eliminating both the 12-businessday requirement and the 30-calendar-day window while still requiring that no more than four business days in succession elapse without a quotation, see Amended Rule 15c211f3iA, and 2 limit the amount of time during which broker-dealers may rely on the exception to quote securities of issuers that they have a reasonable basis under the circumstances for believing are shell companies, see Amended Rule 15c211f3B2.

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15c211 that expressed interest in the formation of an expert market for certain securities that become ineligible for quotation after the Compliance Date because the information required by the Rule is not current and publicly available for the issuers of those securities.6 In response to comments, the Commission stated that, under certain conditions and circumstances, an expert market could enhance liquidity for sophisticated or professional investors in grey market securities,7 as well as for small companies seeking growth opportunities that might prefer to be quoted in a market that is limited to such persons.8
The Commission stated that it preliminarily believes that any such expert market must not have the potential to develop into a parallel market for which quotations are accessible by retail investors and the general public. 9
The Commission stated that it has the authority to issue exemptive relief by order, under Section 36 of the Exchange Act and under the Amended Rule,10 to facilitate the formation and implementation of such an expert market. The Commission also stated that, in doing so, it may consider certain safeguards to protect retail investors, such as 1 the types of investors who may access quotations in this market e.g., sophisticated investors that have the ability to assess an investment opportunity, including the ability to analyze its risks and rewards, and 2
the types of securities that may be quoted in such a market e.g., those that were quoted in reliance on the piggyback exception on the business day preceding the initial quotation that is published or submitted in any such market.11
B. Request for Exemptive Relief by OTC
Link LLC
In response to the Commissions discussion, OTC Link LLC OTC Link LLC, a wholly owned subsidiary of OTC Markets Group Inc. OTC Markets Group, has submitted a request on 6 Comments are available on the Commissions website at https www.sec.gov/comments/s7/14/
19/s71419.htm.
7 Grey market securities are securities that trade over-the-counter but for which no quoted prices are published or submitted in a quotation medium for buyers and sellers to access.
8 See Adopting Release at 68145.
9 Id.
10 The exemptive authority provision of Rule 15c211 has been re-lettered from paragraph h to paragraph g under the Amended Rule. In addition, the standard for exemptive authority under the Amended Rule conforms to the provision for exemptive authority in Section 36 of the Exchange Act. See id. at 68167.
11 See id. at 68145.

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