Technical Notice

OTC Equity Securities Minimum Quotation Size Processing Requirements Delayed until November 12, 2012

November 2, 2012

Due to the effects of Hurricane Sandy on the Northeast region of the United States and the difficulties for firms to operate in a normal capacity, FINRA will postpone the release modifying the OTC equity minimum quotation tier structure until Monday, November 12, 2012. This release was scheduled to be implemented on Monday, November 5, 2012.

Under FINRA Rule 6433, every member firm that functions as a market maker in OTC equity securities by entering firm quotations into the OTC Bulletin Board Service (OTCBB) (or any other inter-dealer quotation system that permits quotation updates on a real-time basis) must honor those quotations for the minimum size defined (as described in the tables below).

Please note, the OTCBB system will not be automatically modifying firms' quote sizes in the transition from the current minimum quote tier sizes to the new minimum quote tier sizes. Therefore, firms quoting OTC equity securities on the morning of November 12, 2012, must ensure their quote sizes meet the new minimum tier size requirements or update their quote sizes in order to be compliant with the revised minimum size tier structure.

Current Quotation Tier Structure (in effect until November 12, 2012)

Price (Bid or Offer) Minimum Quote Size
0–.50 5,000
.51–1.00 2,500
1.01–10.00 500
10.01–100.00 200
100.01–200.00 100
200.01–500.00 25
500.01–1000.00 10
1000.01–2500.00 5
2500.01+ 1

Modified Quotation Tier Structure (in effect for a minimum of one year after November 12, 2012)

Price (Bid or Offer) Minimum Quote Size
0.0001–0.0999 10,000
0.10–0.1999 5,000
0.20–0.5099 2,500
0.51–0.9999 1,000
1.00–174.99 100
175.00+ 1

Please contact Equities Business Services with questions regarding this implementation.