Sorry to interrupt. May be relevant to some of you who trade OTC NASD, and hopefully the OTC CDN will change. It is most definitely a good thing, although the exchange will likely remain volatile. I trade them infrequently, but I know some of you do. Sorry for being off topic here, but I thought it may be relevant to some of you I know on this thread.
SOURCE: National Association of Securities Dealers, Inc.
NASD Board Approves Limit Order Pilot Protection
Program For the OTC Bulletin Board
WASHINGTON, Jan. 27 /PRNewswire/ -- The National Association of Securities Dealers,
Inc.
(NASD©), today announced that its Board has approved a pilot program that will provide
protection to investors who
place limit orders for some OTC Bulletin Board© (OTCBB) securities. If approved by the
Securities and Exchange
Commission (SEC), the program will require Market Makers in a select group of OTCBB
securities to execute customer
limit orders before trading for their own accounts.
Under the new program, Market Makers will be prohibited from executing proprietary
trades at prices superior or equal to
a customer's limit order without providing contemporaneous execution of the customer's
order. Contemporaneous is
defined as ``within a reasonable time frame, but not to exceed five minutes.' This
definition takes into consideration the
fact that, without an automated means of execution, Market Makers in OTCBB securities
must execute those orders
manually.
``Since the introduction of the Internet as a mainstream marketing communications tool
for small issuers and innovative
brokers, investor participation in the OTC equity market has grown dramatically,' said J.
Patrick Campbell, chief operating
officer of Nasdaq. ``We believe that these new investor protection provisions will greatly
benefit the OTCBB market.'
If approved by the SEC, the 12-month ``Limit Order Protection Pilot' program will phase
in 300 OTCBB securities over a
period of several weeks. Securities selected will be the 200 most active plus an
additional 100 to complete the pilot based
on other factors including some that have been delisted from The Nasdaq Stock Market©
and now trade on the OTCBB.
In the last four years, the OTCBB has experienced growth of 106% in Market Maker
positions, 687% in average daily
share volume, and 96% in average daily dollar volume.
The OTCBB is a quotation medium for subscribing members, not an issuer listing
service, and should not be confused with
The Nasdaq Stock Market(SM). OTCBB securities are traded by a community of Market
Makers that enter quotes and trade
reports through a highly sophisticated, closed computer network, which is accessed
through Nasdaq Workstation IITM.
OTCBB companies are not required to meet Nasdaq listing standards.
The National Association of Securities Dealers, Inc., is the largest securities-industry,
self-regulatory organization in the
United States. It is the parent organization of The Nasdaq Stock Market©, The American
Stock Exchange©, and NASD
Regulation, Inc. For more information about the NASD and its subsidiaries, please visit
the following Web sites:
www.nasd.com; www.nasdaq.com; www.amex.com; www.nasdr.com; or the Nasdaq
Newsroom(SM) at
www.nasdaqnews.com. For more information about the OTC Bulletin Board, please visit
www.otcbb.com.
SOURCE: National Association of Securities Dealers, Inc. |
