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PENNY STOCK RULES

 WASHINGTON, July 12 /PRNewswire/ -- The Securities and Exchange Commission, National Association of Securities Dealers, Inc. (NASD), New York Stock Exchange (NYSE) and 40 State Securities Commissions working through the North American Securities Administrators Association (NASAA), today commenced a coordinated examination effort to determine whether broker-dealers are in compliance with the commission's Penny Stock Rules (Securities Exchange Act Rules 15g-1 through 15g-6). The Penny Stock Rules, most of which became effective on Jan. 1, 1993, impose enhanced disclosure and record keeping requirements on broker- dealers purchasing from or selling to the public certain low-priced, non NASDAQ, non-exchange listed securities ("Penny Stocks").
 The new rules represent an important investor protection mechanism to ensure that broker-dealers inform investors about the risks and costs associated with buying and selling Penny Stocks. In particular, the rules require broker-dealers to provide investors with a special risk disclosure document explaining the characteristics of Penny Stocks and the penny stock market prior to effecting any recommended transaction in a Penny Stock. Before executing a transaction in any security defined as a Penny Stock pursuant to Securities Exchange Act Rule 3a51-1, broker-dealers also must disclose information concerning the current market and market price for the Penny Stock and the compensation that the firm and individual sales agent will receive from the transaction.
 In 1990, when Securities Exchange Act Rule 15c2-6 ("Cold-Call Rule") became effective, the commission, the NASD and the state of Florida conducted a similar coordinated examination effort to verify compliance by broker-dealers with the Cold Call Rule.
 -0- 7/12/93
 /CONTACT: Don Saxon of the North American Securities Administrators Association, 904-488-9805/


CO: Securities and Exchange Commission; National Association of
 Securities Dealers, Inc.; New York Stock Exchange; North American
 Securities Administrators Association ST: District of Columbia IN: FIN SU:


KD-IH -- DC036 -- 0508 07/12/93 14:45 EDT
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Publication:PR Newswire
Date:Jul 12, 1993
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