OTC Bulletin Board (OTCBB)
About the time that NASDAQ became a stock market, the SEC was asked to establish an electronic system solely to display the quotes of OTC securities. Out of this came the OTC Bulletin Board. The OTC Bulletin Board is an electronic quotation system for OTC equity securities, and it is a dealer system, meaning that only market makers may apply to quote securities on this service.
Because the OTCBB is a quotation service for its market makers and not an issuer listing service or securities exchange, there are no quantitative listing requirements that must be met. However, beginning in 1999 with the passage of the OTCBB Eligibility Rule, securities were required to report their current financial statements to the SEC and other regulators to be registered.
The OTCBB allows users to view real-time quotes pertaining to OTC non-listed equity securities, last-sale prices, and volume information relating to OTC non-listed securities. The OTCBB does not give users the ability to execute transactions. It simply allows OTCBB users to enter and view quotations.
A member firm that has qualified as a market maker in a particular OTCBB-eligible security may enter into the OTCBB service:
- • Firm quotes (priced bids)
- • Unpriced indications of interest (including bid wanted and offer wanted). These bids allow participants to ascertain levels of indicated interest in a security.
- • Bid o