Many
microcap stocks trade in the “over-the-counter” (OTC)
market and are quoted on OTC systems, such as the OTC Bulletin
board (OTCBB) or the “pink Sheets.”
Currently,
only about half of the 6,500 companies whose securities
are quoted on OTCBB file reports with the SEC. In January
1999, the SEC approved a new NASD rule allowing the NASD
to require that all OTCBB companies file updated financial
reports with the SEC or with their banking or insurance
regulators. The new rule applies immediately to companies
that first appear on the OTCBB after January 4, 1999. For
those companies that were on the OTCBB as of January 4,
1999, the new rule will be phased in over a twelve-month
period beginning in July 1999. By June 2000, the new rule
will apply to all companies on the OTCBB. At that time,
companies refusing to file with the SEC or
their banking or insurance regulators cannot remain on
the OTCBB.
Tip: When
an OTCBB company fails to file its reports on time, the NASD will
add a fifth letter "E" to its four-letter stock
symbol. The company then has 30 days to file with the SEC or
60 days to file with its banking or insurance regulator.
If it's still delinquent after the grace period, the company
will be removed from the OTCBB. You'll find a list of securities
that have been removed from the OTCBB at www.otcbb.com.
source:Securities
and Exchange Commission
Lois Center-Shabazz is the founder of MsFinancialSavvy.com and author of the
3-time award-winning personal finance book, Let's Get Financial Savvy! ISBN
#0971979502.
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