CITE

    15 USC Sec. 78q-2                                           01/08/2008

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2B - SECURITIES EXCHANGES

HEAD

    Sec. 78q-2. Automated quotation systems for penny stocks

STATUTE

    (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.

SOURCE

    (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.