The OTCBB stands for the Over The Counter Market Bulletin Board. This is where securities trade that are not part of NASDAQ or any national securities exchange. The OTCBB is a regulated quotation service that provides real time quotes, sales prices and volume information for equities. Many hot penny stocks to watch reside here.
In 1990, the OTC Market was started as a part of a larger market reform process and to provide more transparency for equity markets. As part of the Penny Stock Reform Act, the Securities and Exchange Commission wanted a new electronic system for quotes and trade transactions. This system provided both large and small investors real-time information, how many trades were taking place in a stock, the direction of the trades, stock either going up or down, how many buyers versus sellers, and the volume.
In 1997, along came the OTCBB as a permanent operation which then required companies to report and file quarterly and yearly financials. Up until this point, companies were not easily researched and it was difficult to verify information, especially genuine financials. Investors were left to rely upon press releases and information put out by the company to make "heads or tails" of a company's condition. This led to much speculation and many investors stayed away from many great companies. Remember, many companies like Toys R Us and Microsoft traded for a $1 at one time.
Next, the Securities and Exchange Commission instituted the OTCBB Eligibility Rule. This simply meant that companies already trading on The Over the Counter Market had to report financials. If a company then did not report financials within a 30-day period, it would be delisted and removed from the OTC and moved to the Pink Sheets. That's another discussion, as some of the best penny stocks available can be found there, if you do your due diligence.
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