When should notice of penalty bids be submitted to the relevant SRO under Rule 104?
Notice of penalty bids need only be furnished when the penalty bid will be assessed. If notice of a penalty bid is given at the time of pricing because an agreement among the underwriters contains a penalty bid provision, but the penalty bid is not in fact imposed, an amended notice should be filed to reflect that no assessments were made. The Commission has granted an exemption from the notification requirement contained in Rule 104(h)(2) for nonconvertible debt securities, nonconvertible preferred securities and asset-backed securities that are rated investment grade. Q: A company’s debt is listed on an exchange, but a majority of the debt is expected to trade in the over-the-counter market. Where should the company’s underwriter give notice of its syndicate covering transactions, as required by Rule 104? A: The underwriter should give notice to the NASD, the self-regulatory organization that has direct oversight authority over the principal market for the security. Rule 105 Q: If a
