---
kind: "section"
citation: "15 U.S.C. § 78q–2"
title: "15"
title_heading: "Commerce and Trade"
number: "78q–2"
heading: "Automated quotation systems for penny stocks"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78q-2"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78q–2. Automated quotation systems for penny stocks

- (a) **Findings—** The Congress finds that—
  - (1) the market for [penny stocks](/usc/15/78c.md?p=a-51-A) suffers from a lack of reliable and accurate quotation and last sale information available to investors and regulators;
  - (2) it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to improve significantly the information available to [brokers](/usc/15/78c.md?p=a-4-A), [dealers](/usc/15/78c.md?p=a-5-A), investors, and regulators with respect to quotations for and transactions in [penny stocks](/usc/15/78c.md?p=a-51-A); and
  - (3) a fully implemented automated quotation system for [penny stocks](/usc/15/78c.md?p=a-51-A) would meet the information needs of investors and market [participants](/usc/15/78c.md?p=a-24) and would add visibility and regulatory and surveillance data to that market.
- (b) **Mandate to facilitate establishment of automated quotation systems—**
  - (1) **In general—** The [Commission](/usc/15/78c.md?p=a-15) shall facilitate the widespread dissemination of reliable and accurate last sale and quotation information with respect to [penny stocks](/usc/15/78c.md?p=a-51-A) in accordance with the findings set forth in [subsection (a)](#a), with a view toward establishing, at the earliest feasible time, one or more automated quotation systems that will collect and disseminate information regarding all [penny stocks](/usc/15/78c.md?p=a-51-A).
  - (2) **Characteristics of systems—** Each such automated quotation system shall—
    - (A) be operated by a registered [securities](/usc/15/78c.md?p=a-10) association or a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) in accordance with such rules as the [Commission](/usc/15/78c.md?p=a-15) and these entities shall prescribe;
    - (B) collect and disseminate quotation and transaction information;
    - (C) except as provided in [subsection (c)](#c), provide bid and ask quotations of participating [brokers](/usc/15/78c.md?p=a-4-A) or [dealers](/usc/15/78c.md?p=a-5-A), or comparably accurate and reliable pricing information, which shall constitute firm bids or offers for at least such minimum numbers of shares or minimum dollar amounts as the [Commission](/usc/15/78c.md?p=a-15) and the registered [securities](/usc/15/78c.md?p=a-10) association or national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) shall require; and
    - (D) provide for the reporting of the volume of [penny stock](/usc/15/78c.md?p=a-51-A) transactions, including last sale reporting, when the volume reaches appropriate levels that the [Commission](/usc/15/78c.md?p=a-15) shall specify by rule or order.
- (c) **Exemptive authority—** The [Commission](/usc/15/78c.md?p=a-15) may, by rule or order, grant such exemptions, in whole or in part, conditionally or unconditionally, to any [penny stock](/usc/15/78c.md?p=a-51-A) or class of [penny stocks](/usc/15/78c.md?p=a-51-A) from the requirements of [subsection (b)](#b) as the [Commission](/usc/15/78c.md?p=a-15) determines to be consistent with the public interest, the protection of investors, and the maintenance of fair and orderly markets.
- (d) **Commission reporting requirements—** The [Commission](/usc/15/78c.md?p=a-15) shall, in each of the first 5 annual reports (under [section 78w(b)(1) of this title](/usc/15/78w.md?p=b-1)) submitted more than 12 months after October 15, 1990, include a description of the status of the [penny stock](/usc/15/78c.md?p=a-51-A) automated quotation system or systems required by [subsection (b)](#b). Such description shall include—
  - (1) a review of the development, implementation, and progress of the project, including achievement of significant milestones and current project schedule; and
  - (2) a review of the activities of registered [securities](/usc/15/78c.md?p=a-10) associations and national [securities](/usc/15/78c.md?p=a-10) [exchanges](/usc/15/78c.md?p=a-1) in the development of the system.

## Source credit

(June 6, 1934, ch. 404, title I, § 17B, as added Pub. L. 101–429, title V, § 506, Oct. 15, 1990, 104 Stat. 955.)

## Notes

### Editorial Notes

### References in Text

Section 78w(b)(1) of this title, referred to in subsec. (d), was omitted from the Code. For further details related to reports referred to in subsec. (d), see Codification note set out under section 78w of this title.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective Oct. 15, 1990, with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(1), (2) of Pub. L. 101–429, set out in an Effective Date of 1990 Amendment note under section 77g of this title.