The OTC (Over-The-Counter) Bulletin Board or OTCBB was a

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

quotation A quotation is the repetition of a sentence, phrase, or passage from speech or text that someone has said or written. In oral speech, it is the representation of an utterance (i.e. of something that a speaker actually said) that is introduced by ...

medium operated by the Financial Industry Regulatory Authority (FINRA) for its subscribing members. FINRA closed the OTCBB on November 8, 2021. The board was used for many

over-the-counter Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs, which may be supplied only to consumers possessing a valid prescr ...

(OTC)

equity Equity may refer to: Finance, accounting and ownership *Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the diff ...

securities that were not listed on the

NASDAQ The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...

or a national stock exchange, it had shrunk significantly as stock have migrated to the trading facilities of the

OTC Markets Group OTC Markets Group (previously known as Pink Sheets) is an American financial market providing price and liquidity information for almost 10,000 over-the-counter (OTC) securities. The group has its headquarters in New York City. OTC-traded se ...

. Broker-dealers who subscribed to the system, which was not electronic, were able to use the OTCBB to enter orders for OTC securities that qualified to be quoted. According to the U.S. Securities and Exchange Commission (SEC), "fraudsters often claim or imply that an OTCBB company is a Nasdaq company to mislead investors into thinking that the company is bigger than it is". FINRA, an "independent,

not-for-profit A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...

organization authorized by

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...

", ran and provided regulatory services to the OTCBB by "writing and enforcing rules governing the activities of more than 4,100 securities firms with approximately 639,780 brokers". The OTCBB formerly collected 100% of quotes, but that number declined with the rise of its competitor

, which uses an electronic quotation system. In September 2009, FINRA announced that it would be selling the OTCBB. OTC Markets Group was the leading contender for purchasing the OTCBB, but terms could not be reached.FINRA Proposal Riles OTC Market
''Traders Magazine''. In September 2010, FINRA announced that it had reached terms for the sale of the OTCBB with Rodman & Renshaw, an investment bank. Along with the sale of the OTCBB and, in an effort to provide uniform regulation to all OTC issues and, subsequently, transparency to the OTC market, FINRA has proposed a "quotation consolidation system". Under the quotation consolidation system, FINRA would require dealers to report all of their quotes to the quotation consolidation system, regardless of the market upon which they were originally quoted. This would enable FINRA to have access to all quotes in OTC issues and regulate the OTC market in its entirety. Pink OTC argues this is

anti-competitive Anti-competitive practices are business or government practices that prevent or reduce competition in a market. Antitrust laws differ among state and federal laws to ensure businesses do not engage in competitive practices that harm other, usuall ...

and an abuse of FINRA's authority. Companies quoted on the OTCBB had to fully report (i.e., current with all required SEC filings) but there were no market capitalization, minimum share price,

corporate governance Corporate governance is defined, described or delineated in diverse ways, depending on the writer's purpose. Writers focused on a disciplinary interest or context (such as accounting, finance, law, or management) often adopt narrow definitions ...

or other requirements to be quoted. Companies which had been "de-listed" from stock exchanges for falling below minimum capitalization, minimum share price or other requirements often ended up being quoted on the OTCBB. An E after the ticker symbol meant that the company was late in its SEC filings. Stock of non-reporting companies (those without current SEC filings) may be quoted on one of the markets operated by OTC Markets Group. When the OTCBB was operational, most OTCBB companies were dually quoted, meaning they were quoted on both the OTCBB and the one of the OTC Markets Group markets. Stocks traded on these markets are usually thinly traded

microcap In business and investing, term microcap stock (also micro-cap) refers to the stock of public companies in the United States which have a market capitalization of roughly $50 million to $300 million. The shares of companies with a market capitali ...

or penny stocks. Both retail and

institutional investors An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-link ...

generally avoid them, because of fears that share prices are easily manipulated and the potential for

fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...

. The SEC issues stern warnings to investors to be aware of common fraud and manipulation schemes. As such, most companies choose to list on more established exchanges such as the

NYSE MKT NYSE American, formerly known as the American Stock Exchange (AMEX), and more recently as NYSE MKT, is an American stock exchange situated in New York City. AMEX was previously a mutual organization, owned by its members. Until 1953, it was kno ...

New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...

, or

once eligible. For a time, FINRA believed that the proposed "quotation consolidation system" would enhance transparency, thereby decreasing the potential for price manipulation or fraud. The suffix ".OB" in a stock-ticker listing signifies "over-the-counter bulletin board" according to its Reuters Instrument Code.

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* * {{DEFAULTSORT:Otc Bulletin Board Electronic trading platforms

See also

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