Pink Sheets Discover Disclosure

Pink Sheets Discover Disclosure



Once upon​ a​ time in​ the world of​ finance there were three kingdoms the most widely recognized was also the most snobbish and​ wealthiest its subjects were affluent and​ known worldwide. Its king was NYSE (New York Stock exchange) the king ruled proudly over his subjects.

Every brokerage firm had a​ stock ticker to​ provide their customer with trade information​ on​ NYSE listed stocks.

The second kingdom was not so well off, it​ had less subjects and​ the inhabitants were much poorer than those ruled by NYSE, the king was named AMEX (American Stock Exchange). They could be classified as​ low middle class.

Now the third kingdom was the largest of​ all, it’s subjects range from middle class to​ very poor, this​ kingdom was ruled by OTC (Over The Counter Market). Some of​ the subjects of​ OTC were always looking to​ migrate to​ NYSE or​ Amex to​ escape the stigma attached to​ being a​ resident of​ OTC.

Some of​ the stock that at​ one time traded in​ the Pink Sheets are well known today such as​ EDS and​ many new IPO, as​ well as​ bank and​ insurance companies, but you​ also had stocks trading for​ a​ fraction​ of​ a​ penny.

if​ you​ wanted a​ price on​ a​ OTC stock you​ would call your​ broker who looked in​ the pink sheets to​ see who the market makers were, he would get on​ the phone to​ a​ market maker and​ ask the person​ answering the phone for​ a​ quote, the person​ answering the phone then gets the price from a​ blackboard in​ the front of​ the room and​ give it​ to​ the broker making the inquiry, this​ would take some time.

Market makers had a​ quote boy in​ the front of​ the trading room changing the blackboard every time a​ trader yelled a​ different price, this​ markets were good for​ 100 shares,

in​ those days it​ was possible to​ buy from one market maker at​ a​ price and​ turn around and​ sell to​ another market maker at​ higher price because the one market maker had no idea what the market was unless he made a​ phone call. So you​ always found disparities in​ the price of​ a​ stock.

Along came a​ knight in​ shining armor named NASDAQ the NASD Automatic Quotation​ System, which allow brokers to​ see the price by computer, it​ gave the mean market (average market) not the best price, but it​ was a​ giant step forward.

These NASDAQ machine did not provide live quotes you​ had to​ keep on​ pressing the enter key in​ order to​ see the updated quote.

and​ eventually all the better stocks were gradually included on​ the NASDAQ systems leaving the more obscure and​ unprofitable companies to​ trade on​ the pink sheet. and​ again​ the NASD decided to​ sink the pink sheets even further into the land​ of​ obscurity by creating the OTC Bulletin​ Board.

The OTC Bulletin​ Board started out not requiring much information​ from the issuer but gradually started requesting more information​ and​ now they must have audited financial and​ must be reporting.

All this​ left the pink as​ the only market in​ total disclosure darkness being the only ones not requiring the issuer to​ disclose its financial reports.

But on​ February 15, 2018 a​ little daylight came into the pinks, on​ this​ day a​ new policy was implemented, this​ policy requires issuers of​ newly traded securities to​ disclose adequate current information​ to​ the investing public.

this​ is​ only required of​ those companies which have securities quoted on​ an​ unsolicited basis on​ the pink sheets, and​ have never been listed on​ an​ exchange or​ quoted on​ the OTCBB.

if​ an​ issuer is​ quoted on​ an​ unsolicited basis, this​ means that the NASD has not cleared a​ market maker to​ enter a​ quote in​ the security pursuant to​ SEC Rule 15c2-11. Instead, a​ broker is​ relying on​ an​ exemption​ to​ the rule in​ order to​ display a​ quotation​ representing an​ unsolicited customer order. this​ exception​ has been used to​ trade securities of​ new issuers without any disclosure to​ the investing public. to​ address this​ situation, in​ October 2018, Pink Sheets revised their policy for​ brokers entering unsolicited quotes in​ a​ new security that has never been listed on​ an​ exchange or​ quoted on​ the OTCBB. They now require that prior to​ publication​ of​ an​ unsolicited quote in​ the Pink Sheets for​ such securities the broker must ascertain​ that the issuer has made adequate current information​ publicly available on​ the pink sheets website. The disclosure policy has been a​ good attempt at​ creating transparency of​ the basic information​ that investors trading in​ public markets deserve.

Pink Sheets is​ now extending this​ requirement to​ companies that were previously quoted on​ an​ unsolicited basis. if​ the companies did not make the required disclosure by February 15, 2018, they removed their displayed quotation​ from the website.

this​ new policy is​ a​ big step forward for​ the Pink Sheets and​ they should be applauded for​ it, but I Personally would like to​ see all companies being required to​ make complete disclosure.

if​ a​ company is​ unable for​ whatever reason​ to​ disclose their finances and​ corporate updates to​ the investing public then they should not be allow to​ trade on​ any public market.

These companies operating in​ total darkness are the vehicles being used by stock manipulators to​ scam the investing public, even though the Pink Sheets have taken this​ giant step they must remove all non-disclosing companies from the public market place.

I am not sure the pink Sheets have the authority to​ do so but SEC does, and​ the SEC is​ the agency responsible for​ protecting the investing public.

Lets congratulate the Pink sheet for​ this​ change in​ policy and​ hope that they will continue to​ upgrade their standards, as​ a​ direct result of​ this​ policy we at​ Genesis Corporate Advisors are changing our policy of​ not bringing any company public to​ the Pink sheets.

Effective immediately we will begin​ considering candidate for​ the Pink sheets but our preference will continue to​ be The OTC Bulletin​ Board because we want as​ much transparency as​ possible.

in​ order to​ have viable healthy market you​ must have willing investors with access to​ current and​ accurate information.

for​ additional information​ visit: http://www.genesiscorporateadvisors.com




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