|May 24, 2000
Washington, DC – The National Association of Securities Dealers, Inc. (NASD®) today announced that the Securities and Exchange Commission (SEC) has approved its proposal to allow The Nasdaq Stock Market® to halt trading and quotations in OTC Bulletin Board® (OTCBB) securities under certain circumstances. The new rule—which will afford investors better protection—will be implemented on June 26, 2000.
Halts will be initiated in OTCBB securities when:
"Nasdaq’s expanded authority to halt trades in OTC Bulletin Board securities will provide better protection to those who buy and sell securities quoted on that service, " said Adena Friedman, a Nasdaq Vice President and product manager of the OTCBB. "The new authority will allow us to coordinate trading halts with other markets, which we have previously been unable to do, as well as halt trading of OTCBB companies that do not provide essential information in a timely manner."
Once the new rule is implemented, data received from a foreign securities exchange or market will first be evaluated by Nasdaq to determine if a halt in an OTCBB security is appropriate before initiating a trading or quotation halt. Trading and quotations in the security may resume when Nasdaq has decided, after close review, that there is no further need for the halt, or when five business days have passed from the initial date (whichever occurs first).
Prior to the SEC’s approval, Nasdaq was authorized to impose halts only in Nasdaq-listed securities and securities listed on a national securities exchange and traded in the Nasdaq Third Market. Until this point, however, Nasdaq did not have the authority to impose trading or quotation halts in OTCBB securities.
Trade and quote halt information will be available on a real-time basis on the OTCBB Web site at www.otcbb.com. Halt information will be accessible from the home page under "Trade Halts."
The OTCBB is an electronic quotation system—not an issuer service—that is regulated by the NASD. The OTCBB is separate and distinct from Nasdaq, although Nasdaq has been authorized by the NASD to oversee its operation.
The National Association of Securities Dealers, Inc., is the largest securities-industry, self-regulatory organization in the United States. It is the parent organization of The Nasdaq Stock Market®, The American Stock Exchange®, and NASD Regulation, Inc. For more information about the NASD and its subsidiaries, please visit the following Web sites: www.nasd.com; www.nasdaq.com; www.amex.com; or the Nasdaq NewsroomSM at www.nasdaqnews.com.