(Bloomberg) — The U.S. financial industrys self- funded regulator is seeking to shut its little-used, 24-year-old market for over-the-counter stock trading.
Volume on the Financial Industry Regulatory Authoritys OTC Bulletin Board Service has dwindled so much that eliminating the system poses no threat to trading, Finra said in a filing yesterday. During the period reviewed in the document, OTCBB only provided quotes for 27 out of 10,000 over-the-counter companies in the U.S.
Created in 1990, the OTCBB service has been supplanted by the system run by OTC Markets Inc., which today handled about $800 million of trading and 5.8 billion shares. Corporations trading over-the-counter have either been deemed ineligible for membership on the New York Stock Exchange or Nasdaq Stock Market, or are simply too immature to apply.
If Finra is successful in shuttering OTCBB, all over-the- counter stock trading in the U.S. will either take place on brokers internal platforms or through OTC Markets, according to its chief executive officer, Cromwell Coulson.
When they brought out the bulletin board, the private market wasnt providing quote transparency to the space, said Coulson, who was in charge of OTC Markets in the 1990s when it was known as the Pink Sheets. Now its not needed anymore because the private market is doing it.
