Trading of “Pink No Information” securities
Rule 15c2-11 under the Securities Exchange Act of 1934 affects the market for certain over-the-counter (OTC) securities classified as Pink No Information, Grey Market, and Expert Market OTC securities (collectively, “Impacted OTC Securities”). These amendments limit the ability of broker-dealers to publish quotations for companies that have not provided required current financial and company information to regulators and investors. The amendments also restrict retail investors from opening new positions in Impacted OTC Securities.
How These Rules Affect You
Firstrade customers are not able to buy Impacted OTC Securities through our platform. We restrict new buy orders for these securities due to the difficulty in liquidating them.
While Firstrade does accept closing orders to liquidate positions in these securities, selling them can be challenging as quoting and market liquidity may be limited.
The following restrictions apply to any closing order for Impacted OTC Securities:
You must not be an Affiliate, Insider, or Control Person of the company.
Only limit orders will be accepted.
Quotes for the security may not be available.
Additional restrictions related to the purchase and sale of these securities may also apply.
Why Did the SEC Amend Rule 15c2-11?
The SEC amended this rule because the lack of current or publicly available information from issuers of Impacted OTC Securities may put investors at a disadvantage. As a result, the SEC restricted the ability to display quotations for these securities.
Where Can I Find the List of Impacted OTC Securities?
The list of Impacted OTC Securities can change daily. The most accurate source for this list is the “Stock Screener” tool on the OTC Markets Group website: OTC Markets Stock Screener (Go to Stock Screener > Markets from the PINKS drop-down menu, select Pink Limited, and then select Expert Market).