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Microcap & Penny Stocks : TGL WHAAAAAAAT! Alerts, thoughts, discussion. -- Ignore unavailable to you. Want to Upgrade?

To: ChrisJP who wrote (55973)	7/22/2000 2:24:23 PM
From: Jim Bishop	Read Replies (3) \| Respond to of 150070

By Giando Argentina Published by OTCNN.com 07/21/2000 09:35 AM CST The OTCBB has recently undergone several changes to enhance investor confidence. The most important of these changes was introduction of the Eligibility Rule, requiring that all companies quoted on the OTCBB become and remain fully compliant through the filing of regular financial statements with the SEC. While the OTCBB market has the appearance, to the novice investor, of being closely related to the NASDAQ, there are other key differences that investors should be aware of: The quotation and trading of issues on the NASDAQ and OTCBB is very similar, including the Market Maker system, and the LEVEL 2 screen. The main difference that some may not be aware of is that the OTCBB is an order entry system not a fully automated order execution system like the NASDAQ. Therefore, trade execution delays are a factor to consider. The limit order is a must in the OTCBB, during a fast moving market, with many orders reaching a trading desk simultaneously market orders may execute at very different prices than those intended. Another difference to consider is that while the NASDAQ maintains a relationship with each issue trading, the OTCBB does not. The process to be listed on the NASDAQ is lengthier, 6 to 8 weeks compared to as few as 3 day for the OTCBB. To become quoted on the OTCBB market, a company must seek a Market Maker to fill out the proper documentation required to commence trading. Less supervision of companies shifts the burden of investigative work onto the investor. The NASDAQ has very stringent listing requirements that have to be met, the OTCBB on the other hand has but one - companies must report periodic financials to the SEC. The Market Makers operate by slightly different rules on the OTCBB as well. One difference is the Limit Order Protection rule. This NASDAQ rule prevents the firms making a market from trading their accounts ahead of customers’ limit orders. Changes are in the works regarding Limit Order Protection on the OTCBB, a few weeks ago a pilot (test) program was announced. The OTCBB is a market that in my opinion is changing rapidly. Let’s not forget that the market is approximately 10 years old and only the last 3 years have seen it in full operation. More regulation will be imported from the primary markets to make it a more equitable market for the investors. The individual investors have started a movement to attempt to pressure government agencies to regulate the Market Makers. To make them abide by the same rules as the NASDAQ. Simple request I think, but the more we move to a market that mirrors the NASDAQ then the companies that comprise the OTCBB might have to abide by more stringent listing requirements as well. The companies are currently required to do nothing more than file recent financials and locate a Market Maker willing to quote the stock. Some companies with no cash flow, hardly any assets but an idea, find the necessary capital to develop through quotation on the OTCBB. More regulation and requirements will probably stifle these young imaginative companies but reducing their access to the public markets. Likewise, more regulation of Market Makers may seem like an advantage at first glance, but the downside to less risk is less reward. The OTCBB is where most of my trading takes place. It holds potential for great profit but also great risk. I think the potential for gains is what brings most investors here.