Securities Attorneys Helping You Meet 15c2-11 Requirements & Application
The basis of a 15c2-11 application is intended to ensure that a market maker has adequate information and has completed sufficient due diligence on an Issuer before it quotes its securities. In addition, Rule 15c2-11 requires that a market maker make such information available to the public upon request. There are exemptions to the 15c2-11 application. One such standard exemption is where another market maker has completed the 15c2-11 application process and quotes security for 30 consecutive days. Such issuer’s securities are considered “piggyback qualified.” As such, a new market maker wishing to quote the securities may “piggyback” on a previously filed 15c2-11 application.
Helping Companies With Their 15c2-11 Applications
The over-the-counter (OTC) market is a quotation medium for subscribing members, including OTCQB and OTCQX for reporting issuers, and pink sheets for non-reporting issuers. The over-the-counter market is not a listing service for Issuers such as a national exchange (for example, the Nasdaq Stock Market, AMEX, NYSE, etc.). Accordingly, the Issuer does not apply for listing. Instead, a Market Maker applies to FINRA for the right to quote a particular security and make a market for specific protection on the OTC market (OTCQB, OTCQX). The application is called a 15c2-11 application, named for Securities Exchange Commission C.
15c2-11 Application Basics
The basis of a 15C2-11 application is intended to ensure that a market maker has adequate information and has completed sufficient due diligence on an Issuer before it quotes its securities. In addition, Rule 15C2-11 requires that a market maker make such information available to the public upon request.
There are exemptions to the 15C2-11 application. One standard exemption is when another market maker completes the 15C2-11 application process and quotes security for 30 consecutive days. Such Issuer’s securities are considered “piggyback qualified,” as such, a new market maker wising to quote the securities may “piggyback” on a previously filed 15C2-11 application.
The 15C2-11 application process is similar to a registration process in that the Issuer provides disclosure information to a market maker, who in turn files such information with FINRA, who comments on the information and asks additional questions. When FINRA is satisfied that the market maker has adequate disclosure (as provided by the Issuer) and that the Issuer has answered all questions the market maker may have (which have usually been posed by the FINRA), FINRA will clear the 15C2-11 application and the Issuer’s securities can be quoted and traded.
The same 15C2-11 application is used to apply to quote securities on the pink sheets OTCQB, OTCQX, and, absent an exemption, to move a quotation from the pink sheets to the over-the-counter market.
Although the market maker applies, it is based on information provided by the Issuer. Accordingly, it is incumbent upon the Issuer to put together sufficient information and disclosure and to respond to comments. An Issuer needs qualified securities counsel to assist in this process.
Contact Anthony L.G., PLLC, For Further Guidance
Meeting the 15c2-11 application requirements can be challenging. Anthony L.G., PLLC, can help your company meet these standards so you can continue with your business interests as planned. Call 877-541-3263 or visit our contact page to schedule your initial consultation today.