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What is OTCBB?
- OTC Bulletin Board
- Real time quote listing system with no listing standards
- Stock quotes are firm, DPP quotes are not firm
- Minimum quote size varies
- Quotes can be one or two sided, unpriced indications of interest, and bids/offers that represent unsolicited customer interest
- Quotes must include trading desk phone number
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What is the difference between OTCBB and OTC Pink?
OTC pink issuers have no requirement to file with the SEC
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Before quoting a nonlisted equity, what must a BD do?
- Submit info to FINRA on Form 211 3 days prior to listing
- Collect information in 10K, 10Q, or prospectus
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What is the piggyback exception?
- BDs don’t have to file a Form 211 if:
- Security has been regularly and continuously quoted for 30 days
- Quote has appeared on at least 12/30 days
- No more than 4 business days without a quote
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What must a BD disclose to a customer for a penny stock transaction?
- Current quote for the security
- Compensation BD will receive for the transaction
- Compensation that RR will receive for the transaction
- Must provide customer with a monthly statement as long as they hold the stock in their account.
- Must provide customer with a risk disclosure document before trading.
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