§ 78q-2. — Automated quotation systems for penny stocks.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC78q-2]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2B--SECURITIES EXCHANGES
Sec. 78q-2. Automated quotation systems for penny stocks
(a) Findings
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) Mandate to facilitate establishment of automated quotation systems
(1) In general
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) of this section, 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) Characteristics of systems
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) of this section,
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) Exemptive authority
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) of this
section as the Commission determines to be consistent with the public
interest, the protection of investors, and the maintenance of fair and
orderly markets.
(d) Commission reporting requirements
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) of this
section. 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.
(June 6, 1934, ch. 404, title I, Sec. 17B, as added Pub. L. 101-429,
title V, Sec. 506, Oct. 15, 1990, 104 Stat. 955.)
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.
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.
