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Overview of the OTCBB
The OTC Bulletin Board(OTCBB) is a regulated quotation service that
displays real-time quotes, last-sale prices, and volume information
in over-the-counter (OTC) equity securities. An OTC equity security
generally is any equity that is not listed or traded on NASDAQ or
national securities exchange. OTCBB securities include national,
regional, and foreign equity issues, warrants, American Depositary
Receipts (ADR), and Direct Participation Programs (DPPs).
History of OTCBB
In June 1990, the OTCBB began operation, on a pilot basis, as part
of important market structure reforms to provide transparency in the
OTC equities market.The Penny Stock Reform Act of 1990 mandated the
U.S. Securities and Exchange Commission (SEC) to establish an
electronic system that met the requirements of Section 17B of the
Exchange Act. The system was designed to facilitate the widespread
publication of quotation and last-sale information. Since December
1993, firms have been required to report trades in all domestic OTC
equity securities through the Automated Confirmation Transaction
ServiceSM(ACTSM) within 90 seconds of the transaction.
In April 1997, the SEC approved the operation of the OTCBB on a
permanent basis with some modifications, and in May 1997, DPPs
became eligible for quotation on the OTCBB.In April 1998, all
foreign securities and ADRs that are fully registered with the SEC
became eligible for the display of real-time quotes, last-sale
prices, and volume information on the OTCBB.
On January 4, 1999, the SEC approved the OTCBB Eligibility Rule.
Securities not quoted on the OTCBB as of that date will be required
to report their current financial information to the SEC, banking,
or insurance regulators in order to meet eligibility requirements.
Non-reporting companies whose securities were already quoted on the
OTCBB will be granted a grace period to comply with the new
requirements. Those companies will be phased in beginning in July
1999 and by June 2000, current financial information about all
domestic companies that are quoted on the OTCBB will be publicly
available. |
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