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NASD may kick out firms
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December 9, 1997: 6:38 a.m. ET
Up to 3,400 companies may be kicked off Nasdaq Bulletin Board, report says
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NEW YORK (CNNfn) - In a move to further clean up the image of the Nasdaq, the National Association of Securities Dealers is believed poised to kick out as many as 3,400 stocks that trade on the stock market's lowest tier.
The NASD board is expected to tentatively approve a proposal to kick the companies off of the so-called "bulletin board" if they don't comply with securities regulators, the Wall Street Journal reported Tuesday.
The OTC Bulletin Board is an electronic forum where brokers can get lists of market makers and trade roughly 6,800 securities. However, the stocks aren't listed on the Nasdaq market itself and companies aren't required to meet listing standards of the Nasdaq's National Market nor file financial statements with the Securities and Exchange Commission.
Board members are also expected to discuss prohibiting brokerage firms from quoting price for OTC Bulletin Board stocks if the brokers don't have current, reliable financial information on the company.
If the proposals are approved on Thursday, it will be put out for comment by members. Any of the companies that are no longer eligible may still be listed on the so-called "Pink Sheets" -- a less automated quotation system not affiliated with the Nasdaq.
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