Please Route To: Head Traders; Technical Contacts; Compliance Officers
What you need to know:
- On November 16, 2005, the Securities and Exchange Commission (SEC) approved the proposed rule change to NASD Rule 6530, also known as the Eligibility Rule.
- Under the rule change, OTC Bulletin Board (OTCBB) issuers that are cited for filing delinquency three times in a 24-month period and those removed for failure to file two times in a 24-month period will be ineligible for quotation by an NASD member.
- The new rule will apply to filings for reporting periods ending on and after October 1, 2005.
Who you should contact: OTC Bulletin Board at 301.978.8263
What is the current NASD Eligibility Rule 6530?
NASD Rule 6530, also known as the Eligibility Rule, requires that an issuer be current in its required periodic financial reports in order to be eligible for quotation on the OTCBB.
What is the amended rule?
On November 16, 2005, the SEC approved the proposed rule change to NASD Rule 6530. Under the rule change, OTCBB issuers that file late, but within the grace period allowed by Rule 6530, three times in a 24-month period and those removed for failure to file two times in a 24-month period will be ineligible for quotation by an NASD member.
This change protects the public interest by ensuring that timely financial information is routinely available to investors by OTCBB issuers.
How do securities regain eligibility?
Following removal under this new rule, an issuer’s securities would again become eligible for quotation on the OTCBB when the issuer has filed periodic reports for one year in a timely manner.
Who is subject to the amended Eligibility Rule?
The amended Eligibility Rule applies to filings for reporting periods ending on and after October 1, 2005. Delinquent filings prior to that period will not count toward the new rule.
Who should I contact for more information?
The OTC Bulletin Board (OTCBB) is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (OTC) equity securities. An OTC equity security generally is any equity that is not listed or traded on NASDAQ or a national securities exchange. OTCBB securities include national, regional, and foreign equity issues, warrants, units, ADRs, and Direct Participation Programs (DPPs).