SEC Seeks Comment on Penny Stock Disclosure Rule
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This notice keeps the SEC’s penny stock disclosure paperwork review moving forward. Rule 15g-2 requires broker-dealers to give customers a risk disclosure document before their first penny stock transaction, wait two business days before completing the trade, and keep the customer’s signed acknowledgement for three years. The practical impact falls on broker-dealers that handle penny stock trades. They must continue managing customer disclosures, acknowledgements, waiting periods, and records, while the SEC asks the public to comment on the estimated paperwork burden.
AI-generated summary. May contain errors. Refer to official sources for legal decisions.
Key Changes
- SEC is seeking public comment on extending the information collection for Rule 15g-2.
- Broker-dealers must continue giving penny stock risk disclosures before a customer’s first transaction.
- Broker-dealers must keep signed customer acknowledgements for at least three years.
Obligations
What this law requires
Before effecting the first penny stock transaction for or with a customer’s account, the broker-dealer must provide the customer with the penny stock risk disclosure document containing the information required by Schedule 15G.
Before effecting the first penny stock transaction for or with a customer’s account, the broker-dealer must receive the customer’s signed and dated acknowledgement of receipt of the penny stock disclosure document.
A broker-dealer must not effect a penny stock transaction for or with a customer’s account less than two business days after sending the customer the penny stock disclosure document.
Broker-dealers must maintain a copy of each customer’s written acknowledgement of receipt of the penny stock disclosure document for at least three years following the date of acknowledgement.