SEC Proposes Improvements to Retail Investor Protections

The SEC has issued a proposed rule, Publication or Submission of Quotations Without Specified Information.

The proposal would amend the rule in the Securities and Exchange Act of 1934 that governs “the publication of quotations for securities in a quotation medium other than a national securities exchange, i.e., over-the-counter (‘OTC’) securities.” Specifically, the proposed amendments would:

• “[P]rovide greater transparency to investors and other market participants by requiring that information about the issuer and the security be current and publicly available.”
• “[L]imit certain existing exceptions to the Rule to provide greater protections to retail investors.”
• “[R]educe regulatory burdens on broker-dealers quoting certain OTC securities that may be less susceptible to potential fraud and manipulation.”
• “[S]treamline the Rule and remove obsolete provisions without undermining the important investor protections of the Rule.”

Comments on the proposed rule are due 60 days after the date of its publication in the Federal Register. For more information, see the press release and proposed rule on the SEC’s Web site.