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To: Evan who wrote (1633)	6/2/1998 5:52:00 AM
From: BlueCheap	Respond to of 7209

NEW NASDAQ RULES: On May 7, 1998, the National Association of Securities Dealers, Inc. (NASDr) Board of Governors approved a series of proposed rule changes for the OTC Bulletin Boardr (OTCBB) and the OTC market. These rules, which will now be sent to the Securities and Exchange Commission (SEC) for approval, will ensure that current financial information about domestic companies that are quoted on the OTCBB is publicly available. Presently, NASD rules require foreign issuers to file with the SEC. The rules also will require brokers to take additional steps before they recommend a transaction in any OTC security, and provide investors in all OTC transactions with increased disclosure. The rules approved will: OTC Bulletin Board Eligibility Rule - Permit only those domestic companies that report their current financial information to the SEC, banking, or insurance regulators to be quoted on the OTCBB. If an issuer is delinquent in its reports, there will be a grace period of 30 days during which Market Makers may continue to quote the security. Non-reporting companies whose securities are already quoted on the OTCBB will have 6-12 months to comply with the new requirements once the rule becomes effective. Recommendation Rule - Require brokerage firms to review current financial statements (i.e., put out in the last 12 months) about the issuer before they recommend a transaction in any OTC security (a security that is not listed on Nasdaqr or any registered national securities exchange). Additionally, firms must designate a qualified registered individual to review the information required by the rule. Disclosure Rule - Require brokerage firms to provide investors with written disclosure of the differences between OTC securities and those that trade on a listed market. The disclosure statement will be provided on each customer's confirmation following any trade in an OTC security. Under the new OTC Bulletin Board Eligibility Rule, any company that does not make current filings with the SEC or U.S. bank or insurance regulators will be eliminated from the OTCBB after the phase-in period. Companies that are not eligible to be quoted on the OTCBB would be eligible to be quoted in other quotation mediums, such as the Pink Sheets. The proposed Recommendation and Disclosure rules would not apply to transactions in securities of banks and insurance companies, and to companies with more than $100 million in assets and $10 million in shareholder equity. Transactions with institutional investors will also be exempt. In December 1997, the NASD Board agreed on the importance of the reform proposals and sought public comment on them. During more than two months of public comment, the NASD received numerous comment letters, all of which were reviewed prior to developing these final revised proposals. The rule changes will now be filed with the SEC, and will subsequently published for public comment in the Federal Register.