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What is a stock exchange?
Stock exchanges have specific quantitative and
qualitative listing and maintenance standards which are
stringently monitored and enforced. Companies listed on
an exchange have reporting obligations to the exchange
and a direct business relationship exists between the
exchange and its listed companies.
What is the OTC Market?
The OTC market consists of unlisted securities.
Issuers of these securities often have no reporting
obligations to any federal regulatory authority
(non-reporting). There are no minimum required standards
and no business relationship exists between the quotation
services (OTC-Bulletin Board, "Pink Sheets")
and the issuers.
What are the new requirements
for the OTC Bulletin Board?
On January 7, 1999, the Security and Exchange
Commission (SEC) signed an order approving the proposed
amendments to NASD Rules 6530 and 6540 to limit
quotations on the OTC Bulletin BoardŌ
("OTCBB") to the securities of issuers that are
current in their reports filed with the SEC or other
regulatory authority, and to prohibit a member from
quoting a security on the OTCBB unless the issuer has
made current filings, respectively. All companies will
have to become "reporting"companies. Many OTCBB
companies do file with the SEC. These filings may be
retrieved online from the SEC EDGAR Database.
What is the difference
between OTCBB and the Pink Sheets?
The OTCBB and the "Pink Sheets" are
competing quotation services for OTC equity securities.
The "Pink Sheets" are operated by the National
Quotation Bureau, LLC (NQB) and are a static paper
quotation medium printed weekly and distributed to
broker/dealers while the OTCBB displays electronic
real-time quotes, last-sale prices, and volume
information for domestic securities, foreign securities,
and ADRs. An electronic version of the Pink Sheets is
updated once a day and disseminated over market data
vendor terminals.
Where can I get phone
and address information for an OTCBB issuer?
OTCBB issuers are not required to maintain current
address and contact information with The Nasdaq Stock
Market, Inc. or the NASD. This information is available,
however, for many OTCBB issuers. The 1998 OTC Bulletin
Board Fact Book and Company Directory, accessible from
the Trading Data area of this Web site, contains trading
symbol, name and 1997 summary trading statistics for
every OTCBB issue. Address and contact information as of
December 31, 1997 are also included when available. The
1998 OTC Bulletin Board Fact Book and Company Directory
was created from data as of December 31, 1997. If you are
unable to retrieve information for a particular OTCBB
security, this security was not quoted on the OTC
Bulletin Board as of December 31, 1997.
Can a company be delisted?
No. A company can not be delisted from the OTCBB. All
OTCBB issues, however, must maintain at least one
registered Market Maker to remain on the OTCBB. When the
last Market Maker in a security withdraws from the stock,
the issue is removed from the OTCBB.
Why don't I receive Inside
Quote information for all OTCBB securities?
At least two Market Makers must post both bid and ask
quotations to calculate the inside market for a security.
Because only one Market Maker is required to keep a
security on the OTCBB and Market Makers are permitted to
post one-sided quotes and unpriced indications of
interest, there may be securities for which inside quotes
can not be calculated.
Who is responsible for
regulating the OTCBB?
NASD Regulation regulates the quotation activity and
trade practices of OTCBB Market Makers. OTCBB issuers are
not regulated by The Nasdaq Stock Market, Inc., the NASD,
or NASD Regulation.
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