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15c2-11 Resource Center
Rule 15c2-11 establishes the requirements for companies to have a public market by governing a broker’s ability to submit or publish quotations (i.e. bids and offers) in OTC securities in trading systems such as our OTC Link ATS. The Rule does not apply to the underlying transactions or the ability of an investor to buy or sell a security, but rather the ability to publish a quotation, or an “indication of interest,” to the greater investing public.
How did the amendments to Rule 15c2-11 in 2021 change the market?
The Rule requires that current information about an issuer be publicly available in order for a security to become quoted initially, and remain quoted on an ongoing basis. Quotations submitted on an “unsolicited” basis are still permitted under the amended Rule, subject to additional requirements for insiders and affiliates.
OTC Markets Group now plays a greater role in bringing companies onto our markets. Our OTC Link ATS trading platform is a recognized “qualified interdealer quotation system” and brokers are able to rely on our current information designations for OTC equity securities in lieu of submitting a Form 211 with FINRA. This regulatory status streamlines the pathway to the public markets for companies that are current in their disclosure obligations.
Resources:
15c2-11 Market Chart (Until June 30, 2025)
In 2021, the SEC indicated that Rule 15c2-11 extended beyond equity securities and applied to Fixed Income securities, including corporate bonds and asset backed securities.
On November 22, 2024 the SEC indefinitely extended ‘No Action’ relief to the SEC Rule 15c2-11 as it relates to Fixed Income Securities.
Bringing OTC Markets Group long standing expertise of applying Rule 15c2-11 to the equities market we offer a Fixed Income 2-11 product that provides compliance on TRACE eligible Corporate Debt Securities. This market data product provides a tactical view into which securities qualify for exemptions under the rule.
By integrating this user-friendly product into their daily operations, compliance teams and trading desks can easily assess their compliance with federal securities law.
No Action Letters
Learn More about our Fixed Income 15c2-11 Data Product
Our premium offering provides the following key data points, twice daily:
15c2-11 Status for the TRACE corporate fixed income universe (~170K securities)
Explanation of Compliance Status by utilizing a ‘Reason Code’ concept
Leverages Public Determinations made by OTC Markets for issuers of OTC equities
Clear definition of logic employed (e.g. Guarantor Logic) allowing end user firms to create custom processes
Access to Fixed Income 2-11 information via our Canari compliance web application
Explore more details including User Data and Sample Data File
Rule 15c2-11 Equity Securities Compliance Products
Compliance teams can access OTC Markets Group expertise of Rule 15c2-11 and specific 15c2-11 data points (ie. Prop Quote Eligibility) through the following Market Data products:
Security Data File: includes over 40 data fields that provide key security reference data for all OTCQX, OTCQB, Pink and Grey securities. Designed for broker-dealers, the Security Data File is made available twice daily at 4 AM ET and 9:30 PM ET
Compliance Data: provides broker-dealers and compliance/risk mitigation teams with essential compliance-specific data points on all OTC equity securities (~22K). Delivered twice daily in pipe-delimited format, the file provides subscribers with unparalleled insight for the universe of OTC equities.
Compliance Analytics: offers quantitative values in 23 risk categories as well as an aggregate risk value for all OTC equity securities (~22 K). The product contains two files: a base file which contains the details regarding the risk values and an analytics file which contains the risk analysis at the security level.
How can companies go public under Rule 15c2-11?
Generally speaking, companies that do not have a public market (i.e. do not have public, priced broker-dealer quotes) may become quoted by undergoing an “Initial Review” by OTC Markets Group or by having a broker-dealer file and clear a Form 211 with FINRA. Companies that may require an initial review include private companies looking to start a public market, non-U.S. companies listed on a foreign stock exchange, companies that have become delinquent in their reporting obligations and companies with securities on the Expert Market.
OTC Markets Group will conduct the initial reviews as part of the OTCQX and OTCQB application and approval process for qualifying companies. Shell Companies (or companies that display characteristics common to Shell Companies) applying to the OTCQB Market should work directly with a broker-dealer to submit a Form 211 with FINRA.
What does my company have to do to comply with Rule 15c2-11?
Issuers must make certain required information publicly available to remain in compliance with Rule 15c2-11.
Generally, companies that meet our OTCQX Rules, OTCQB Rules and Pink Basic Disclosure Guidelines (Pink Current and Limited market tiers), and those that comply with their SEC or home country reporting requirements, will remain eligible for public broker-dealer quotes though certain additional requirements may apply under the amended Rule 15c2-11 (e.g. restrictions on shell companies, unsolicited quoting).
More information about company requirements for the Pink Market is available here. Please note that OTC Markets will not confirm whether issuer information is “current” or “publicly available” with respect to amended Rule 15c2-11’s provisions regarding “Catch-All” companies unless such information has been published through the OTC Disclosure & News Service. Issuers may contact us at issuers@otcmarkets.com with any questions about complying with the Rule 15c2-11 information requirements.
How can “International Reporting” companies with a primary listing on a non-U.S. exchange remain in the “Current Information” tier?
Companies providing disclosure in English consistent with their home country requirements and pursuant to SEC Rule 12g3-2(b) may be eligible for continued public quotations on the “Pink Current Information” tier.
Companies listed on a non-U.S. exchange that requires English disclosure will remain eligible for our Pink Current Information tier, provided that OTC Markets Group is able to confirm that the company has made required financial disclosure within the past 12 months. Exchanges marked with an asterisk on our list of Qualified Foreign Exchanges indicates that OTC Markets Group treats the exchange as requiring English language disclosure.
Companies listed on a foreign exchange that does not require English language disclosure may meet the Rule 15c2-11 requirements by publishing disclosure via the OTC Disclosure & News Service. See Updated Rule 15c2-11 Compliance Guidelines for American Depositary Receipts
Why are some “International Reporting” companies in the “Pink Limited Information” or “Expert Market” tiers?
When OTC Markets Group is not able to confirm that a company has current, publicly available English language disclosure, the company may still be eligible for public broker-dealer quotes on the “Pink Limited” market tier if it meets certain trading volume, assets and shareholder equity thresholds under the large company exception.
Other instances when a non-U.S. issuer may be moved to the Pink Limited Information tier include where OTC Markets Group is unable to confirm that the company published timely financial information.
Non-U.S. issuers that are delisted from their primary non-U.S. exchange, or are delinquent in their reporting obligations (where OTC Markets Group is not able to confirm disclosure within the past 16 months), may move to the Expert Market for unsolicited quotes only.
What is the Rule 15c2-11 large company exception?
Rule 15c2-11 contains various exceptions that allow for public broker-dealer quotes outside the scope of the rule’s disclosure requirements, including one for securities of well-capitalized issuers that meet the following thresholds: (1) average worldwide daily trading volume of $100,000, (2) $50 million in assets, and (3) $10 million in shareholders’ equity, based on reported trading volume and the issuer’s recent audited financials.
Securities that OTC Markets Group determines meet the “Large Company” exception may be eligible for proprietary broker-dealer quotations on OTC Link. These securities may be placed in the Pink Current or Pink Limited market tier, based on whether they meet additional disclosure requirements.
What reports do SEC registered companies need to remain current?
In order to remain designated as “Current Information” on our markets, companies with Exchange Act reporting requirements must make timely filings of all reports required to be filed with the SEC.
Rule 15c2-11 permits additional time (180 days) for Exchange Act reporting companies to continue to be eligible for public broker-dealer quotes. Accordingly, companies that make their annual or quarterly reports publicly available (via EDGAR) within 180 days of the end of the applicable quarterly or annual reporting period will still be eligible for broker-dealer proprietary quotes, but will be designated as “Limited Information”.
Note: Filings made pursuant to 12b-25 will be treated as timely and, absent other delays, will not cause a security to move from Pink Current to Pink Limited. Regulation CF and Regulation A reporting companies are subject to different timeframes under Rule 15c2-11.
Issuers of securities that are not eligible for broker-dealer proprietary quotes, and may only be quoted on an unsolicited basis, must be current in their filings with the SEC to remain on the Pink Market. When such a company becomes delinquent in its SEC filings, their securities will be moved to the Expert Market, with no intervening grace period, until such time the company has filed the required periodic report(s). Securities quoted on an unsolicited only basis are identified on our website with the following message:
Warning! This security is eligible for Unsolicited Quotes Only
This stock is not eligible for proprietary broker-dealer quotations. All quotes in this stock reflect unsolicited customer orders. Unsolicited-Only stocks have a higher risk of wider spreads, increased volatility, and price dislocations. Investors may have difficulty selling this stock. An initial review by a broker-dealer under SEC Rule15c2-11 is required for brokers to publish competing quotes and provide continuous market making.
As of March 28, 2023, the amendments to Rule 15c2-11 prohibited Shell companies from being eligible for broker-dealer proprietary quotes.
However, the security may be the subject of unsolicited customer quotations. A notification will appear on otcmarkets.com advising investors that only unsolicited quotes are permitted in this stock. Any company that continues to make information available pursuant to Rule 15c2-11 will remain on the Pink Market. Companies that cease to make information available pursuant to the Rule will be moved to the Expert Market.
How can a shell company become eligible for proprietary quotes again?
The company will be ineligible for broker-dealer proprietary quotes unless it becomes an operating company and a broker-dealer complies with the information review requirement and files a Form 211 with FINRA.
How does OTC Markets determine which companies are shell companies?
The Rule defines a shell company as any issuer that has:
(i) No or nominal operations; and
(ii) Either:
(A) No or nominal assets;
(B) Assets consisting solely of cash and cash equivalents; or
(C) Assets consisting of any amount of cash and cash equivalents and nominal other assets.
Companies are expected to use this guidance in reporting their shell status on their periodic filings.
Generally, OTC Markets determines a company is a shell under The Rule when the company has identified itself as a shell on its periodic filings with the SEC, filings submitted via the OTC Disclosure & News Service, or in its filings with its home-country stock exchange.
As a reminder, companies may be designated with the Shell Risk flag upon removal of Shell flag on otcmarkets.com. For more information about the Shell Risk flag is available here.
What happens to an operating company that becomes a shell company?
Under The Rule, operating companies that become shell companies are not eligible for broker-dealer proprietary quotations. Quotes will be automatically removed the next business day after shell status is processed. Such companies would have to become an operating company again and undergo the information review process with a broker-dealer by filing a Form 211 with FINRA before they would be eligible for proprietary quotations. Any company that continues to make information available to investors pursuant to Rule 15c2-11 will remain on the Pink Market. Companies that cease to make information available pursuant to the Rule will be moved to the Expert Market.
Why is my broker imposing suitability or trading restrictions on certain OTC securities (e.g. “Liquidate Only)?
We understand that certain retail brokerage firms may use our marketplace and compliance designations (e.g. Current, Limited, Expert, Caveat Emptor) to develop internal compliance policies. Please reach out to your broker directly for additional information related to its policies and restrictions.
What is the Expert Market®?
The Expert Market is a market tier that serves broker-dealer pricing and best execution needs in securities that are restricted from public quoting or trading. OTC Markets Group designates certain securities for quoting on the Expert Market based on a lack of issuer disclosure and other security attributes. Quotes on the Expert Market are unsolicited only and distribution of Expert Market quotations is limited to broker-dealers and other professional and sophisticated investors.
Unsolicited quotes represent an unsolicited customer order, meaning it (1) was submitted solely on behalf of a customer; (2) represents the customer's indication of interest in the security; and (3) does not involve the broker’s solicitation of the customer's interest.
