On September 24, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice (Notice) reminding firms of their applicable obligations when publishing a quote in an OTC security, in addition to filing a Form 211. Securities Exchange Act of 1934 (SEA) Rule 15c2-11 prevents a broker-dealer from initiating quotations in an OTC security unless such broker-dealer has reviewed and verified that certain information about the issuer is accurate and from a reliable source. FINRA Rule 6432 requires a firm to file a Form 211 with FINRA to show compliance with SEA Rule 15c2-11.
The FINRA Notice highlights that filing the Form 211 is not a replacement for members in satisfying their obligations under other applicable rules and regulations. Namely, the Notice states that firms must be mindful of the requirements under Section 5 of the Securities Act of 1933, which generally prohibits the offer or sale of securities without an effective registration statement, unless an exemption applies. Also, the Notice mentions that before a firm initiates or resumes quotations in an OTC security, the firm should check whether the securities have been the subject of a suspension or revocation.
The full Notice is available here.