Form 211

DEFINITION of 'Form 211'

  1. A form that must be completed by a market maker and filed with the Financial Industry Regulatory Authority (FINRA) to initiate or resume quotations for a security on the OTC Bulletin Board, OTC Markets or any similar quotation medium. Form 211 completion indicates that the market maker has satisfied all applicable requirements of SEC Rule 15c2-11, as well as the filing and information requirements of FINRA Rule 6432.
  1. A form that must be submitted to the Internal Revenue Service by a “whistleblower” who seeks to claim a reward for providing information about tax evasion to the U.S. government.

BREAKING DOWN 'Form 211'

Since the OTC Bulletin Board (BB) operates as a dealer system, all securities quoted on it must be sponsored by participating market makers. A market maker registers such a security by completing Form 211 unless an exemption applies. Such exemption is granted to an issue if it meets certain criteria – for instance, if it is listed on a regional exchange and is current in its SEC filings – and requires completing a Rule 15c2-11 Regional Security Exemption Form.

As the OTCBB is only a quotation service for FINRA market makers and not a listing service, OTCBB issuers have no listing requirements to meet – unlike issuers listed on stock exchanges. While OTCBB issuers have no financial disclosure requirements, market makers must meet eligibility and regulatory requirements related to quotation display and quotation activity for such securities, which necessitates completing Form 211.

Form 211 seeks information about the issuer and the security in five parts:

  • Part 1 – Issuer and Security Information.
  • Part 2 – Issuer Information.
  • Part 3 – Supplementary Information: Required information includes the identity of persons for whom the quotation is being submitted, issuer trading suspensions within the past 12 months (if applicable) and any other material or adverse information relating to the issuer.
  • Part 4 – This section has to be completed for OTCBB quotation requests only. It seeks information on periodic financial reports filed by the issuer through the SEC’s EDGAR system, or filed with another regulatory authority.
  • Part 5 – Certification: This section has to be signed by the firm employee who can be contacted about information provided in the Form 211, as well as the firm’s registered principal responsible for the application. The signatories attest to the accuracy and reliability of the information accompanying the form.

Most market makers request additional information from the issuer, over and above the Form 211 requirements, as part of their due diligence.

The market maker must submit the completed Form 211 to the FINRA OTC Compliance Unit, along with two copies of the required issuer information, at least three business days before the security can be quoted on the OTCBB. Once the security has been cleared for quotation, Nasdaq’s Corporate Data Integrity Department notifies the market maker that it has been registered in the security and may commence quoting it.

A whistleblower can submit IRS Form 211 to claim a reward unless he or she was employed by the U.S. Department of the Treasury at the time of receiving or providing the information on the tax evasion, or is a present or former federal government employee who received the information in the course of official duties. Form 211 rewards can be substantial, up to 30 percent of the additional tax, penalty and other amounts the IRS Whistleblower Office collects.

RELATED TERMS
  1. Interdealer Quotation System

    The exchange system comprised of the Nasdaq (National Association ...
  2. Pink Sheets

    A daily publication compiled by the National Quotation Bureau ...
  3. European Currency Quotation

    An indirect quotation in the foreign exchange markets whereby ...
  4. Over-The-Counter Bulletin Board ...

    A regulated electronic trading service offered by the National ...
  5. Market Maker

    A broker-dealer firm that accepts the risk of holding a certain ...
  6. SEC Form 10-C

    A form filed with the Securities and Exchange Commission (SEC) ...
Related Articles
  1. Investing

    Electronic Trading: The Role of a Market Maker

    Market makers compete for customer order flows by displaying buy and sell quotations for a guaranteed number of shares. The difference between the price at which a market maker is willing to ...
  2. Markets

    SEC Filings: Forms You Need To Know

    The forms companies are required to file provide a clear view of their histories and progress.
  3. Investing

    Electronic Trading: Level I, II and III Access

    There are a variety of ways in which Nasdaq quotes security prices to the public. These levels vary on the amount of information and access they provide to investors. Level I This type of quote ...
  4. Investing

    How A Company Files With The SEC

    Filing with the SEC is not as complicated as you might thing -- just be meticulous about following the steps.
  5. Markets

    FINRA: How It Protects Investors

    Find out the history of FINRA, and how it's organized to monitor the markets and protect investors.
  6. Retirement

    Retirement Plan Tax Form 5329: When To File

    Read this if you've taken early distributions or owe excess-contribution or excess-accumulation penalties.
  7. Personal Finance

    What's IRS Form 2848 Used For?

    It's a power of attorney tax form and here's what it can, and cannot, do.
  8. Personal Finance

    Late with Your Taxes? Grab IRS Form 4868

    Fill out this form to get a few more months to file your tax return. But remember, April 15 is still the payment due date if you owe taxes.
  9. Financial Advisor

    SEC's CARDS Plan Creates Controversy for Brokers

    The securities industry isn't happy with the hand it may be dealt with the SEC's proposed CARDS rules.
  10. Personal Finance

    What IRS Form 1023 Is Used For

    To be treated as a tax-exempt organization, start by filling out this form.
RELATED FAQS
  1. What are the steps to get a company listed on the OTCBB?

    The over-the-counter bulletin board (OTCBB) is a regulated quotation service for over-the-counter (OTC) securities. The securities ... Read Answer >>
  2. What are the SEC (Securities And Exchange Commission) rules about OTC (over-the-counter) ...

    Find out how the Securities and Exchange Commission and the Financial Industry Regulatory Authority regulate trades on the ... Read Answer >>
  3. How do I buy an over-the-counter stock?

    The process of purchasing over-the-counter (OTC) stocks is different than purchasing stock from companies on the NYSE and ... Read Answer >>
  4. How is trading volume regulated by the Securities and Exchange Commission (SEC)?

    Learn about how the SEC uses the trading volume formula as one requirement for an exemption to the ban on the resale of restricted ... Read Answer >>
  5. I want to start my own brokerage company, how do I become a member of FINRA?

    Before you read on, note that the Financial Industry Regulatory Authority (FINRA), (previously the National Association of ... Read Answer >>
  6. How is a penny stock created?

    Understand how penny stocks are issued and regulated, and learn how these sometimes rewarding but always risky investments ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center