On January 4, 1999, the Securities and Exchange Commission (SEC) approved the National Association of Securities Dealers (NASD®) OTC Bulletin Board® (OTCBB) Eligibility Rule. The changes were approved as proposed in the Federal Register on November 4, 1998 and will ensure that current financial information is publicly available for domestic securities quoted on the OTCBB. A similar rule requiring foreign issuers to publicly report financial information became effective April 1, 1998.
Effective immediately, new securities quoted on the OTCBB are required to report their current financial information to the SEC, banking, or insurance regulators in order to meet eligibility requirements. Further, all future Form 211 submissions, as well as Form 211 Exemption Forms, for the OTCBB should be accompanied by the Form 211 Addendum.
Non-reporting companies whose securities are currently quoted on the OTCBB will be granted a grace period to comply with the new requirements. Those companies will be phased in, between July 1999, and June 2000. A copy of the phase-in schedule is now available. After an issuer is phased-in, if that issuer becomes delinquent in its public reports, it will be afforded a grace period of 30 to 60 days (depending on the type of issuer) to regain compliance. While in the grace period, during which time the security’s symbol will be appended with a fifth character designator, Market Makers may continue to quote the security. If the issuer has not filed with the appropriate regulatory authority upon expiration of the grace period the issuer will be removed from the service.
Because the OTCBB is a Market Maker quotation system, we have no direct relationship with the issuers quoted. Therefore, we ask Market Makers to communicate the rule’s approval to all OTCBB issuers that they quote. If you would like us to contact an issuer directly, please e-mail all contact information, including issuer name, contact name, address, phone number, and e-mail address to email@example.com with the subject line as "OTCBB Issuer Contact Information."
A list of all OTCBB securities and their eligibility status according to Nasdaq’s records will be posted soon on this Web site. Please e-mail any corrections to the information posted, along with the issuers CIK code, to firstname.lastname@example.org with the subject line as "OTCBB Eligibility Status Correction."
The SEC’s order granting approval of the rule, as well as a link to the rule proposal as published in the Federal Register, are also available on this Web site at Eligibility Rule: SEC Adopting Release 34-40878. Additionally, a Notice to Members will be mailed to NASD members shortly.
For more information on the phase-in procedures, or the Eligibility Rule in general, please review the attached Question & Answer guide. If you have additional questions after reviewing the Q&A, please contact Liz Heese at (202) 728-8191. Finally, please continue to monitor the OTCBB Web site for any further news and developments on the implementation of the Eligibility Rule.