Over-the-Counter Bulletin Board (OTCBB)
Candlefocus EditorOver-the-counter (OTC) stocks are non-exchange listed securities, meaning they are not listed on the New York Stock Exchange. This makes the security easily traded by professionals who normally handle smaller OTC stocks, and the companies may receive OTCBB quotes for the stocks, and the OTCBB provides stocks with current market quotations, trading volume and last sale prices. Companies who choose to list on the platform must provide their financial statements to a relevant federal regulator, such as the U.S. Securities and Exchange Commission.
To be listed on OTCBB, companies must be registered with FINRA and provide timely disclosure of material information and financial reports to investors. Additionally, companies must meet additional criteria such as minimum capital and shareholder equities, to maintain their listing and advertise their stocks within in the network. The liquidity and visibility of the OTCBB drew several prominent companies, such as Twitter and Square, that are currently listed on the exchanges.
The OTCBB had its heyday in the 2000’s, when smaller companies such as biotechs began to use the platform to raise money, however the platforms provided by OTC Markets Group have slowly taken the lion’s share of U. S. OTC stock trading and data. In 2020, FINRA decided to wind down the OTCBB services.
Overall, OTCBB, while a useful platform for less well-known companies to promote their stocks, needed to become compliant with the SEC or it would have been difficult to have increased visibility on the larger scale exchanges. The decision of FINRA to retire the OTCBB may have been due to its low profiles since, many of the successful OTCBB stocks have made it to larger exchanges today. While the OTCBB may be gone, there are currently several other OTC trading services to address the need for non-exchange listed securities.