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SEC Adopts Amendments to Enhance Retail Investor Protections

September 22nd | 2020

The SEC recently adopted amendments to Exchange Act Rule 15c2-11, which are designed to modernize over-the-counter (OTC) market regulatory structure to, among other things, recognize advances in communications technologies. The amended rule also enhances disclosure and investor protection in the OTC market by ensuring that, subject to certain exceptions, broker-dealers do not publish quotations for an issuer’s security when current issuer information is not publicly available. Investors who have access to current and publicly available issuer information are better equipped to make informed decisions about how to allocate their capital and to counteract misinformation that can easily spread online. Brett Redfearn, Director of the Division of Trading and Markets, said that “the amendments strike the right balance between promoting critically important investor protections while at the same time providing new exceptions that should make it easier for certain securities to develop a quoted market.”

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