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Microcap & Penny Stocks : HGRM--Any Followers? -- Ignore unavailable to you. Want to Upgrade?

To: Bob Smith who wrote (3391)	12/16/1999 2:26:00 PM
From: Bob Smith	Respond to of 3576

More... Tech Futures: Sep 24, 1999 By Michael Volker Pink Sheets, Updates on New Media, Portfolio and VCPs In recent columns, I've been critical of the OTC-BB (Over-the-Counter Bulletin Board) stock market in the U.S. A number of companies, expecially from B.C., have opted to list on this market either because of their negative perception of the VSE (Vancouver Stock Exchange) or because they failed to meet the VSE's listing standards. Many companies on the OTC-BB incorrectly say that they are traded on the NASDAQ OTC market. In fact, the NASDAQ market has nothing to do with the OTC! The OTC is an unregulated market and until just recently, OTC companies did not even have to file their corporate reports, thereby escaping much scrutiny. Now that the SEC (Securities and Exchange Commission) in the US is requiring companies to report on a regular basis, many are being bumped off the OTC. Rather than having to comply, some of these are going to the so-called "pink sheets" which is yet another form of stock trading market and one which is just now starting to operate in an on-line mode. These pink sheets are managed by the National Quotation Bureau (http://www.nqb.com). For you students of stock markets, here's a little history for you. In 1911, a Boston book publisher, Arthur Elliott thought it was a good idea to provide a quotation service for people wishing to trade securities. This led to the creation of the National Quotation Bureau (NQB) in 1913 which published market quotations and distributed these on pink sheets of paper to stock dealers throughout the U.S. The Securities and Exchange Commission (SEC) and the National Association of Securities Dealers (NASD) were created in 1933. Dealers were able to use the NQB in order to obtain stock quotes. Thirty years later, NQB was purchased by Commerce Clearing House (CCH), a publisher of reference books. CCH did not invest in new technologies which led the NASD to establish the NASDAQ Stock Market©, a real-time quotation service. The NASD also implemented the OTC-BB market for companies which did not meet the listing criteria for NASDAQ. This is why many promoters incorrectly associate the OTC-BB with NASDAQ. The NQB continued as a paper-based publisher and was acquired by a new group in 1997 which started using new technology to improve its services. Unlisted companies, i.e. those not listed on a recognized exchange like NASDAQ (or the New York or AMEX exchanges), could be traded in other markets. These companies did not have to report or disclose their business affairs to the general public. By the way, the AMEX merged with NASDAQ last year. Early this year, the SEC decreed that OTC-BB companies would have to become "reporting issuers" and start filing corporate information. This summer, NASD will drop over 3,000 companies from the OTC-BB for failing to meet these reporting requirements. The NQB responded to these orphans with the introduction of a real-time OTC quotation facility for the companies that trade OTC, i.e. the Electronic Pink Sheets. Unlike the NASD OTC Bulletin Board (OTC-BB), Issuers (i.e.companies) do not (at least for now) have to be SEC reporting for a market maker to quote their securities in the Pink Sheets. The Pink Sheets is a quotation medium for subscribing members. The NQB continues as a private company which is not in any way affiliated with NASDAQ or the NASD. The bottom line is that companies on the OTC-BB and on the Pink Sheets do not need to meet any listing standards. And the only difference between the two markets is that the OTC-BB requires more public information disclosure than does the Pink Sheets. NASDAQ operates its traditional market as well as a junior, small-cap market. But even the smallcap component dictates some stringent listing criteria (e.g. market cap of US$50 million and share price of $4). Fewer than 20% of the public technology companies in B.C. would meet such a standard.