Pink OTC Markets' Policy Regarding the Publication of Unsolicited Quotes
Pink OTC Markets has recently revised our policy regarding the publication of unsolicited quotes. Prior to February 6, 2006, Pink Sheets LLC permitted broker/dealers to publish unsolicited customer orders in unseasoned securities, provided the issuer of the securities met the following prerequisites:
-
Adequate current information concerning the Issuer is publicly available via the Pink Sheets News Service. This information must be less than 90 days old and include a response to each item or sub-item listed in the Pink Sheets Guidelines for Providing Adequate Current Information, and provides all the information specified in paragraphs (a)(5)(i) to (xiii), inclusive, and paragraph (a)(5)(xvi) of Rule 15c2-113 under the Exchange Act or, if the issuer is an insurance company, the information specified in Section 12(g)(2)(G)(i) of the Exchange Act;
-
The Issuer's transfer agent is registered under the Exchange Act;
-
Counsel for the issuer has provided, and posted to the Pink Sheets News Service, a tradability opinion for the securities being quoted that meets Pink Sheets' requirements as specified in Pink Sheets letter to Attorneys Providing Tradability Opinions (7/20/2005);
-
The issuer is not a shell company within the meaning of Rule 405 under the Securities Act of 1933 ("Rule 405"). A shell company is defined within the meaning of such term under Rule 405 under the Securities Act of 1933 ("Rule 405") whether or not the issuer is a registrant under Rule 405. It should be noted that a company with "nominal" operations is a "shell company" within the meaning of Rule 405. Moreover, a company that is technically not a "shell company" because it has some limited operations would nonetheless be considered a "shell company" for purposes of entering an unsolicited quote in the Pink Sheets, and "nominal" operations would include any operations for which the primary purpose is to avoid classification of a company as a "shell" company";
-
The security is DTC eligible; and
-
The firm publishing the unsolicited quote in the Pink Sheets must have submitted a Form 211 to the NASD prior to submitting the Pink Sheets Unsolicited Quote Entry Form. A copy of the Form 211 must be provided to Pink Sheets in conjunction with the request to enter an unsolicited quote. (This requirement to submit a Form 211 to the NASD was added in November 2005).
Issuers of previously unseasoned securities that originally entered the Pink Sheets using the unsolicited quote exemption and continue to be quoted only on an unsolicited basis are required by Pink Sheets to continue to make periodic disclosure using the Pink Sheets News Service. If the Issuer ceases to provide current information, Pink Sheets may cease to allow broker/dealers to publish quotes in its securities.
Following is a list of forms and other documents needed to comply with these disclosure requirements.
