FINRA proposes to amend FINRA Rule 6433, Minimum Quotation Size Requirements for OTC Equity Securities, which currently requires every member functioning as an OTC Market Maker in an OTC Equity Security that enters firm quotations into any inter-dealer quotation system that permits quotation updates on a real-time basis to honor those  quotations for certain minimum sizes (“minimum quotation sizes”). Under the Rule, different minimum quotation sizes apply depending upon the price level of the bid or offer and, therefore, a different minimum quotation size can apply to each side of the market being quoted by the member in a given security. FINRA is proposing changes to the minimum quotation sizes to, among other things, simplify the tier structure, facilitate the display of customer limit orders under new FINRA Rule 6460, Display of Customer Limit Orders, and expand the scope of the rule. As proposed, ... the minimum quotation size required for display of a quotation in an OTC Equity Security would fall into one of six tiers rather than nine tiers. Specifically, for OTC Equity Securities priced:

• between $0.51 and $0.9999/share, the minimum quotation size would be 200 shares;
• between $0.26 and $0.5099/share, the minimum quotation size would be 500 shares;
• between $0.02 and $0.2599/share, the minimum quotation size would be 1,000 shares; and,
• between $0.0001 and $0.0199/share, the minimum quotation size would be 10,000 shares.

For quotations in securities priced at least $1.00/share, the proposed rule generally would parallel the approach taken by the exchanges by setting the minimum quotation size at a round lot of 100 shares, except that, with respect to OTC Equity Securities priced at or above $175.00/share, the minimum quotation size would equal the round lot size applicable to those securities, which is one (1) share. In addition to simplifying the tier structure, FINRA believes that the proposed revisions will benefit investors by facilitating display of customer limit orders under the L/O display rule, which generally requires that OTC Market Makers fully display better-priced customer L/O's (or same-priced customer L/O's that are at the best bid or offer and that increase the OTC Market Maker’s size by more than a de minimis amount). For further details, go to:   [FINRA Rule Filing 11-58, 10/6/11]