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Non-Tech : The future of the OTCBB and Pink Sheets
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To: Rob Phillips who wrote (2)3/26/1999 1:13:00 PM
From: Chris Block  Read Replies (1) of 28
 
The answer is YES, but one must look at the two "types" of fees involved in any stock trade.

One fee is the actual charges that a broker dealer charges its customers. This is usually a base commission and then sometimes a per share charge on orders. The primary reason most brokerage firms charge more for OTCBB and pink sheets is because of the extra red tape involved in doing the trade. There are disclosures for both the customer and the NASD to handle customer orders in this arena. The SBX Nanocap system is provided to brokers to help automate the heavy paper process involved and potentially reduce the fee they charge to their customer. Other firms charge high fees because they simlply don't want your business in these types of stocks.

The second part of a fee is the actual execution price an investor receives in the market. Currently, market makers on the OTCBB have most if not all of the pricing information (order flow) on these stocks. By allowing a customer to post his own orders on the nanocap system, an investor will have more control and exposure of his order, allowing the efficient market forces to act on his trade. You can now trade in between the spread and broadcast your limit orders not just to market makers but to everyone on the Internet. A better execution price for your order often greatly outweighs the commission a broker charges you.

One point of clarification:

SBX only market their system to broker dealers and does not hold customer accounts. If your broker is not currrently a subscriber to SBX Nanocap system, let me know via our website (or this thread) and I will contact them to allow them to become a subscriber. Otherwise I can refer you to a current subscribing Brokerage firm and you can trade through them.
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