Cal. Code Regs. Tit. 10, § 260.216.11 - Identification of Quotations

Current through Register 2022 Notice Reg. No. 16, April 25, 2022

(a) It shall constitute an attempt to induce the purchase or sale of a security by making a "fictitious quotation," within the meaning of subdivision (b) of Section 25216 of the Code, for any broker-dealer to furnish or submit, directly or indirectly, any quotation for a security to an inter-dealer-quotation-system unless:
(1) The inter-dealer-quotation-system is informed, if such is the case, that the quotation is furnished or submitted
(i) by a correspondent broker-dealer for the account or on behalf of another broker-dealer, and if so, the identity of such other broker-dealer; and/or
(ii) in furtherance of one or more other arrangements (including a joint account, guarantee of profit, guarantee against loss, commission, mark-up, mark-down, indication of interest and accommodation arrangement) between or among broker-dealers, and if so, the identity of each broker-dealer participating in any such arrangement or arrangements; provided, however, that th provisions of this paragraph (ii) shall not apply if only one of the broker-dealers participating in any such arrangement or arrangements furnishes or submits a quotation with respect to the security to an inter-dealer-quotation-system.
(2) The inter-dealer-quotation-system to which the quotation is furnished or submitted makes it a general practice to disclose with each published quotation, by appropriate symbol or otherwise, the category or categories (subsection (a)(1)(i) and/or (a)(1)(ii)) in furtherance of which the quotation is submitted, and the identities of all other broker-dealers referred to in subsection (a)(1)(i) and (a)(1)(ii) where such information is supplied to the inter-dealer-quotation-system under the provisions of subsection (a)(1) of this section.
(b) It shall constitute an attempt to induce the purchase or sale of a security by making a "fictitious quotation," within the meaning of subdivision (b) of Section 25216 of the Code, for a broker-dealer to enter into any correspondent or other arrangement (including a joint account, guarantee of profit, guarantee against loss, commission, mark-up, mark-down, indication of interest and accommodation arrangement) in furtherance of which two or more broker-dealers furnish or submit quotations with respect to a particular security unless such broker-dealer informs all broker-dealers furnishing or submitting such quotations of the existence of such correspondent and other arrangements, and the identity of the parties thereto.
(c) For purposes of this section:
(1) The term "inter-dealer-quotation-system" shall mean any system of general circulation to broker-dealers which regularly disseminates quotations of identified broker-dealers but shall not include a quotation sheet prepared and distributed by a broker-dealer in the regular course of his business and containing only quotations of such broker-dealer.
(2) The term "quotation" shall mean any bid or offer, or any indication of interest (such as OW or BW) in any bid or offer.
(3) The term "correspondent" shall mean a broker-dealer who has a direct line of communication to another broker-dealer located in a different city or geographical area.

Notes

Cal. Code Regs. Tit. 10, § 260.216.11

Note: Authority cited: Sections 25216(b) and 25610, Corporations Code. Reference: Section 25216, Corporations Code.

1. Editorial correction adding NOTE filed 4-6-83 (Register 83, No. 15).

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