News Release

NASD Board Approves Creation of New Order Delivery System for OTC Bulletin Board

Washington, DC—The National Association of Securities Dealers, Inc. (NASD®) today announced that the NASD Board of Governors has approved a proposal to create an automated order delivery system for the OTC Bulletin Board® (OTCBB). The need for an automated system arose because of a significant increase in trading activity in the over-the-counter market. The system-which will promote a more efficient market and enhance investor protection-requires approval from the Security and Exchange Commission (SEC).

The proposed order delivery system will enable market participants to execute directed liability orders (orders that when delivered to a broker/dealer imposes an obligation to respond to the order). In addition, the system will allow users to enter, cancel, correct, accept, decline, or execute full or partial orders.

"This order delivery system will provide a fair and more efficient market for all market participants and all investors, especially during periods of increased market activity," said J. Patrick Campbell, Nasdaq’s Chief Operating Officer. "The OTCBB today is far different than it was at its inception ten years ago because of an explosion in retail participation and rigorous efforts by Nasdaq and the NASD to protect investors and the public interest."

The wealth of information for OTC securities on the Internet and the growth of online trading systems that are accessible to individual investors are primary reasons for the explosion in trading activity in the OTCBB. From 1995 to 1999, average daily share volume rose from 41 million to 323 million-and increase of 687 percent. In the first quarter of this year, an average of more than one billion shares were traded each day.

Presently, all order delivery, communication and negotiation between two firms regarding an OTCBB trade are done manually over the telephone. Among the main objectives of providing an order and delivery and execution system for the OTCBB are:

  • to increase the execution speed of customer orders, thus providing a better opportunity for best execution;
  • to enable market participants to contact each other electronically to send and execute orders;
  • to complement the increase in volume and the change in trading behavior in the OTCBB; and
  • to provide the infrastructure necessary to enact new rules aimed at investor protection.

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®, NASD Dispute Resolution, Inc., and NASD Regulation, Inc. For more information about the NASD and its subsidiaries, please visit the following Web sites:;;;; or the Nasdaq NewsroomSM at