FINRA Requirements for Form 211: OTC Market Quotation Eligibility Explained
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For issuers seeking to have their securities quoted on the OTC Markets, the submission and clearance of Form 211 by a FINRA member market maker are crucial steps. This SEO-optimized guide explains FINRA Form 211 requirements, sponsoring market maker documentation, and how to find a market maker for OTC Markets quotation eligibility.
Form 211 ensures compliance with SEC Rule 15c2-11, which governs when a broker-dealer can initiate or resume quotations in an OTC security. Without FINRA Form 211 clearance, no public quotations can appear on the OTC Markets Group’s platforms.
Overview of SEC Rule 15c2-11
Rule 15c2-11 requires that, before publishing or submitting a quotation in an OTC security, a broker-dealer must have reviewed and maintained certain current information about the issuer’s business, financial condition, and management.
Who Files Form 211
Only a FINRA member broker-dealer may file Form 211 with FINRA’s Market Operations Department. The issuer cannot file it directly. The broker-dealer becomes known as the sponsoring market maker.
FINRA’s Form 211 Review Process
FINRA reviews corporate governance, financials, management, share structure, and business operations to ensure that investors have access to accurate and current information.
Required Supporting Documentation
A typical Form 211 submission includes the application, disclosure documents, shareholder list, legal opinion, and corporate resolutions authorizing issuance of securities.
Key FINRA Rules and Guidance
FINRA Rule 6432 governs compliance with Rule 15c2-11. Additional guidance can be found in FINRA Regulatory Notice 21-19 and SEC Release No. 33-10842.
Common Reasons for Form 211 Rejection or Delay
FINRA may refuse or delay processing if disclosure is incomplete, outdated, misleading, or if the issuer fails to respond promptly to comment requests.
Piggyback Exception and Continuous Eligibility
Once Form 211 is cleared, other market makers can publish quotations under the piggyback exception if the issuer remains current with public information requirements.
FINRA’s Discretion to Deny Processing
FINRA can deny processing under Rule 6490 and 6432 if it believes the filing is false or incomplete, or if the issuer appears involved in a manipulative scheme.
Modernized Electronic Submission Process
As of 2024, Form 211 submissions are filed electronically through FINRA’s Firm Gateway, including digital exhibits and issuer CIK numbers.
Post-Approval Obligations of the Market Maker
After approval, the market maker must publish its first-priced quotation within three business days and maintain compliance records.
Practical Guidance for Issuers
Issuers should engage experienced securities counsel, maintain current disclosures, and avoid promotional activity before clearance.
Locating a Sponsoring Market Maker and Preparing Required Documentation
Issuers must find a FINRA member willing to act as a sponsoring market maker. This can be done through counsel referrals, OTC Markets resources, or industry contacts.
Commonly requested documentation includes corporate governance documents, capitalization records, shareholder lists, stock certificates, financials, disclosure statements, officer questionnaires, CUSIP confirmations, and transfer agent letters. Market makers often charge due diligence fees ranging from $10,000 to $25,000, depending on complexity, with preparation time averaging three to six weeks.
Conclusion
FINRA Form 211 compliance demonstrates transparency and readiness to access U.S. public markets. Issuers should prepare complete documentation and work closely with an experienced market maker to ensure a smooth review process.
If you are seeking a security quote on the OTC Markets or would like to speak with a Securities Attorney, Hamilton & Associates Law Group, P.A. is ready to help. Our Founder, Brenda Hamilton, is a nationally known and recognized securities attorney with over two decades of experience assisting issuers worldwide with going public on the Nasdaq, NYSE, and OTC Markets. Since 1998, Ms. Hamilton has been a leading voice in corporate and securities law, representing both domestic and international clients across diverse industries and jurisdictions. Whether you are taking your company public, raising capital, navigating regulatory challenges, or entering new markets, Brenda Hamilton and her team deliver the experience, strategic insight, and results-driven representation you need to succeed.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected].
Hamilton & Associates | Securities Attorneys
Brenda Hamilton, Securities Attorney
200 E Palmetto Rd, Suite 103
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com
