/>iSEC Amends Exchange Act Rule 15c2-11 to Enhance Retail Investor Protections and Modernize Governing Quotations for Over-the-Counter Securities
On September 16, the Securities and Exchange Commission adopted amendments to the Securities Exchange Act of 1934 (Exchange Act) Rule 15c2-11 to modernize the rule, including by recognizing advances in communications technology. The rule requires broker-dealers to review key, basic issuer information before initiating or resuming quotations for the issuer’s security in the over-the-counter (OTC) market.
Currently, certain of the rule’s exceptions permit broker-dealers to maintain a quoted market for an issuer’s security in perpetuity in the absence of current and publicly available information about the issuer. Recognizing the faster flow of information today, the amendments generally prohibit broker-dealers from publishing quotations for an issuer’s security when issuer information is not current and publicly available, subject to certain exceptions. The amendments also add new exceptions for certain OTC securities that may be less susceptible to fraud or manipulation, such as actively traded securities of well-capitalized issuers, and expand the scope of market participants that may comply with the rule’s required review of issuer information.
The amendments to Exchange Act Rule 15c2-11, which was last substantively amended nearly 30 years ago, will become effective 60 days following publication in the Federal Register.
The SEC press release is available here.
SEC Modernizes Disclosures for Banking Registrants
On September 11, the Securities and Exchange Commission announced that it had adopted rules that update and expand the statistical disclosures that bank and savings and loan registrants provide to investors while eliminating duplicative disclosures. The new SEC rules require disclosure about the following:
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distribution of assets, liabilities and stockholders’ equity, the related interest income and expense and interest rates and interest differential;
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weighted average yield of investments in debt securities by maturity;
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maturity analysis of the loan portfolio including the amounts that have predetermined interest rates and floating or adjustable interest rates;
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certain credit ratios and the factors that explain material changes in the ratios, or the related components during the periods presented;
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the allowance for credit losses by loan category; and
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bank deposits including average amounts and rate paid and amounts that are uninsured.
The adopted rules will be effective 30 days after publication in the Federal Register and will apply to fiscal years ending on or after December 15, 2021. Voluntary compliance with the new rules will be accepted prior to such compliance date.
The SEC press release is available here.
SEC Releases Report and Recommendations in Connection With The 39th Annual Small Business Forum
On September 14, the Securities and Exchange Commission released its report and recommendations in connection with the Annual Small Business Forum. The report provides a summary of the forum proceedings, including the recommendations developed by participants for changes needed to the capital raising framework, and the SEC’s responses to the recommendations. The report is available here.
The SEC press release is available here.
