News Release

NASD Board Approves Limit Order Pilot Protection Program for the OTC Bulletin Board

Washington, D.C.—The National Association of Securities Dealers, Inc. (NASD®), today announced that its Board has approved a pilot program that will provide protection to investors who place limit orders for some OTC Bulletin Board® (OTCBB) securities. If approved by the Securities and Exchange Commission (SEC), the program will require Market Makers in a select group of OTCBB securities to execute customer limit orders before trading for their own accounts.

Under the new program, Market Makers will be prohibited from executing proprietary trades at prices superior or equal to a customer’s limit order without providing contemporaneous execution of the customer’s order. Contemporaneous is defined as "within a reasonable time frame, but not to exceed five minutes." This definition takes into consideration the fact that, without an automated means of execution, Market Makers in OTCBB securities must execute those orders manually.

"Since the introduction of the Internet as a mainstream marketing communications tool for small issuers and innovative brokers, investor participation in the OTC equity market has grown dramatically," said J. Patrick Campbell, chief operating officer of Nasdaq. "We believe that these new investor protection provisions will greatly benefit the OTCBB market."

If approved by the SEC, the 12-month "Limit Order Protection Pilot" program will phase in 300 OTCBB securities over a period of several weeks. Securities selected will be the 200 most active plus an additional 100 to complete the pilot based on other factors including some that have been delisted from The Nasdaq Stock Market® and now trade on the OTCBB.

In the last four years, the OTCBB has experienced growth of 106% in Market Maker positions, 687% in average daily share volume, and 96% in average daily dollar volume.

The OTCBB is a quotation medium for subscribing members, not an issuer listing service, and should not be confused with The Nasdaq Stock MarketSM. OTCBB securities are traded by a community of Market Makers that enter quotes and trade reports through a highly sophisticated, closed computer network, which is accessed through Nasdaq Workstation IITM. OTCBB companies are not required to meet Nasdaq listing standards.

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:;;; or the Nasdaq NewsroomSM at For more information about the OTC Bulletin Board, please visit