The OTC Bulletin Board (OTCBB) is a regulated quotation service in the United States that displays real-time quotes, last-sale prices, and volume information in over-the-counter (OTC) equities, including penny stocks. Generally these securities are not listed or traded on NASDAQ or a national securities exchange. OTCBB securities include national, regional, and foreign equity issues, warrants, units, American Depositary Receipts (ADRs), and Direct Participation Programs (DPPs).
There are nearly 10,000 U.S. and global quoted OTC stocks.
The OTCBB began operation on a pilot basis in June 1990, as part of market structure reforms designed to provide transparency in the OTC equities market. The Penny Stock Reform Act of 1990 mandated the U.S. Securities and Exchange Commission (SEC) to establish an electronic system that met the requirements of Section 17B of the Exchange Act. The system was designed to make published quotation and last-sale information available to a wide public. Since December 1993, firms have been required to report trades in all domestic OTC equity securities through the Automated Confirmation Transaction Service within 90 seconds of the transaction.
In April 1997, the SEC approved the permanent operation of the OTCBB with some modifications, and in May 1997, DPPs became eligible for quotation on the OTCBB. In April 1998, all foreign securities and ADRs fully registered with the SEC became eligible for the display of real-time quotes, last-sale prices, and volume information on the OTCBB.
On January 4, 1999, the SEC approved the OTCBB Eligibility Rule, which required securities not quoted on the OTCBB as of that date to report their financial information to the SEC, banking, or insurance regulators in order to become eligible. Non-reporting companies whose securities were already quoted on the OTCBB were granted a grace period to comply with the new requirements.
In October 2014 an SEC filing disclosed FINRA's plans to close the OTCBB, while tightening regulations around data collection from, and fair access to, OTC marketplaces. The filing showed that FINRA was concerned about the difficulty of pricing these stocks because there are so few market makers quoting bids and offers on OTCBB. Investors looking to the inter-dealer quotation system for pricing information could be harmed, according to the filing.