PRIA, Government Policy, Made Personal

Summary

Require creation of one or more automated quote systems for penny stocks and make sure accurate last-sale and quote information is spread widely to brokers, dealers, investors, and regulators. The Commission must promote these systems and work to have them in place as soon as feasible so they cover all penny stocks. Each system must be run by a registered securities association or a national securities exchange under rules set by the Commission and those groups. The systems must collect and share quote and transaction data, give bid and ask quotes (or equally reliable prices) that are firm for minimum share amounts or dollar values set by the Commission and the operator, and report transaction volume and last sales when volume reaches levels the Commission sets. The Commission may grant full or partial exemptions for any penny stock or class of penny stocks if that is consistent with investor protection and fair markets. In each of the first 5 annual reports submitted more than 12 months after October 15, 1990, the Commission must describe the systems’ development, milestones, schedule, and the work of associations and exchanges on the project.

Title 15, §78q–2

Commerce and Trade, Source: USLM XML via OLRC

(a)The Congress finds that—

(1)the market for penny stocks suffers from a lack of reliable and accurate quotation and last sale information available to investors and regulators;

(2)it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to improve significantly the information available to brokers, dealers, investors, and regulators with respect to quotations for and transactions in penny stocks; and

(3)a fully implemented automated quotation system for penny stocks would meet the information needs of investors and market participants and would add visibility and regulatory and surveillance data to that market.

(b)(1)The Commission shall facilitate the widespread dissemination of reliable and accurate last sale and quotation information with respect to penny stocks in accordance with the findings set forth in subsection (a), with a view toward establishing, at the earliest feasible time, one or more automated quotation systems that will collect and disseminate information regarding all penny stocks.

(2)Each such automated quotation system shall—

(A)be operated by a registered securities association or a national securities exchange in accordance with such rules as the Commission and these entities shall prescribe;

(B)collect and disseminate quotation and transaction information;

(C)except as provided in subsection (c), provide bid and ask quotations of participating brokers or dealers, or comparably accurate and reliable pricing information, which shall constitute firm bids or offers for at least such minimum numbers of shares or minimum dollar amounts as the Commission and the registered securities association or national securities exchange shall require; and

(D)provide for the reporting of the volume of penny stock transactions, including last sale reporting, when the volume reaches appropriate levels that the Commission shall specify by rule or order.

(c)The Commission may, by rule or order, grant such exemptions, in whole or in part, conditionally or unconditionally, to any penny stock or class of penny stocks from the requirements of subsection (b) as the Commission determines to be consistent with the public interest, the protection of investors, and the maintenance of fair and orderly markets.

(d)The Commission shall, in each of the first 5 annual reports (under section 78w(b)(1) of this title) submitted more than 12 months after October 15, 1990, include a description of the status of the penny stock automated quotation system or systems required by subsection (b). Such description shall include—

(1)a review of the development, implementation, and progress of the project, including achievement of significant milestones and current project schedule; and

(2)a review of the activities of registered securities associations and national securities exchanges in the development of the system.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 78w(b)(1) of this title, referred to in subsec. (d), was omitted from the Code. For further details related to reports referred to in subsec. (d), see Codification note set out under section 78w of this title.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective Oct. 15, 1990, with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(1), (2) of Pub. L. 101–429, set out in an

Effective Date

of 1990 Amendment note under section 77g of this title.

§78q–2 Automated Quotation Systems for Penny Stocks

Summary

Title 15, §78q–2

Notes & Related Subsidiaries

Editorial Notes

References in Text

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Citations & Metadata