How Rule 15c211 Works for You

Before any company can go public, they need to submit a 15c211 application to FINRA. However, you must establish a shareholder base with at least 35 shareholders and be free-trading. Private companies do not have to go public, but doing so can help you establish a relationship with Market Makers who are FINRA members. Your Market Maker or transfer agent can submit your application, which gives you a trading symbol and allows you to quote your securities on the market.

The Purpose

This rule is to make sure that your Market Maker has enough information to any securities they plan to quote, but it also ensures that they have done their research on you before giving you a quote on their securities. The rule is designed to hold the Market Makers responsible for ensuring that all appropriate information is made public.

The Market Maker

The Market Maker has to be a FINRA member or part of a firm that is a FINRA member. They use their research, capital, and other resources to represent your stock and compete with others to buy/sell stocks they represent.

There are currently more than 500 member firms that can act as Market Makers. They tend to compete for customers by displaying their buy/sell quotes for guaranteed shares. Once the order is received, they sell from or purchase for their inventory, usually in seconds.

Work with Them

You, as the issuer, work with the Market Makers and provide your disclosure information to them. They file that information with FINRA. The 15c211 rule goes to a representative of FINRA, who might comment on the information or question some aspects. When all the questions are answered sufficiently, and FINRA is satisfied that you have provided enough information, they clear the application, which allows your securities to be traded and quoted. Visit Colonial Stock Transfer Company, Inc. for more information.


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