Rule revision uproar

The amendment to SEC Rule 15c2-1, set to go into effect today, is intended to protect investors in over-the-counter (OTC) trading markets from pump-and-dump schemes often seen with penny stocks.

WASHINGTON: The United States Securities and Exchange Commission (SEC) is giving bond markets at least three more months to prepare for a rule revision that industry insiders say would upend trading for some debt securities.

The amendment to SEC Rule 15c2-1, set to go into effect today, is intended to protect investors in over-the-counter (OTC) trading markets from pump-and-dump schemes often seen with penny stocks.

The change mandates that “broker-dealers, in their role as professional gatekeepers to this market, do not publish quotations for an issuer’s security when current issuer information is not publicly available.”