COMTEX) B: NASD: NASD announces SEC approval of OTC Bulletin Board E
B: NASD: NASD announces SEC approval of OTC Bulletin Board Eligibility rule
JAN 7, 1999, M2 Communications - Washington, D.C. -- The National
Association of Securities Dealers, Inc. (NASD), today announced that
the Securities and Exchange Commission (SEC) has approved the NASD's
proposed OTC Bulletin Board Eligibility Rule. This rule permits only
those companies that report their current financial information to the
SEC, banking, or insurance regulators to be quoted on the OTC Bulletin
Board (OTCBB), offering investors more and better information about
OTCBB stocks.
Under the new rule, Market Makers will not be permitted to quote
OTCBB-traded securities unless the issuer has filed periodic reports
with the appropriate regulatory agency. The filing requirement protects
investors by ensuring that they have access to companies' current
financial information when considering investments in OTCBB-traded
securities.
"Thorough and accurate information is the foundation of sound
investment decisions," said Frank G. Zarb, NASD Chairman and Chief
Executive Officer. "By requiring the half of all OTCBB companies that
currently do not provide publicly-available financial reports to join
the half that do, we will take a major step toward improving the
(COMTEX) B: NASD: NASD announces SEC approval of OTC Bulletin Board E
B: NASD: NASD announces SEC approval of OTC Bulletin Board Eligibility rule
JAN 7, 1999, M2 Communications - Washington, D.C. -- The National
Association of Securities Dealers, Inc. (NASD), today announced that
the Securities and Exchange Commission (SEC) has approved the NASD's
proposed OTC Bulletin Board Eligibility Rule. This rule permits only
those companies that report their current financial information to the
SEC, banking, or insurance regulators to be quoted on the OTC Bulletin
Board (OTCBB), offering investors more and better information about
OTCBB stocks.
Under the new rule, Market Makers will not be permitted to quote
OTCBB-traded securities unless the issuer has filed periodic reports
with the appropriate regulatory agency. The filing requirement protects
investors by ensuring that they have access to companies' current
financial information when considering investments in OTCBB-traded
securities.
"Thorough and accurate information is the foundation of sound
investment decisions," said Frank G. Zarb, NASD Chairman and Chief
Executive Officer. "By requiring the half of all OTCBB companies that
currently do not provide publicly-available financial reports to join
the half that do, we will take a major step toward improving the
quality of the microcap market. We are pleased that the SEC has
approved our proposal to effectively eliminate non-reporting companies
from the OTC Bulletin Board."
Under the new rule, any domestic company that does not file periodic
financial reports with the SEC, or with banking or insurance
regulators, will be eliminated from the OTCBB after a phase-in period.
In April 1998, the SEC required all foreign securities on the OTCBB to
be fully registered with the SEC in order to remain quoted.
The new requirement applies immediately to any company first quoted
on the OTCBB after January 4, 1999. Securities already quoted on the
OTCBB as of January 4, 1999, will have until at least July 1999 to
comply with the new requirements. The rule will be phased in over a 12
month period beginning in July 1999 and continuing through June 2000 in
alphabetical increments based upon the company's name as of January 4,
1999. In June 2000, the rule will apply to all companies on the OTCBB.
The filing requirement also means that these companies are subject to
greater regulatory oversight by the SEC and other regulatory
authorities.
The OTC Bulletin Board is a quotation service that displays real-time
quotes, last-sale prices, and volume information in domestic and
certain foreign securities. Eligible securities include national,
regional, and foreign equity issues; and warrants, units, and American
Depositary Receipts (ADRs) not listed on any other U.S. national
securities market or exchange. Although the OTCBB is operated by the
NASD, it is unlike The Nasdaq Stock Market or other listed markets
where individual companies apply for listing and must meet and maintain
strict listing standards; individual brokerage firms, or Market Makers
initiate quotations for specific securities on the OTC Bulletin Board.
Currently, approximately 6,500 securities are quoted on the OTCBB.
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