As good a fit as the OTCBB is for development stage companies, many issuers wonder why the technique is not more widely used by domestic and foreign issuers. There are several reasons why. This 10 page epistle explains in great detail the OTCBB's origin and historic position among other trading platforms; the pervading misconception within the corporate finance community about this system, why the media focuses on sound bite size sensationalism which bypasses this excellent liquidity platform in favor of the IPO hype and finally recent changes which makes trading on the Bulletin Board better than ever.



Every family has a "black sheep", the distant relative who is rough around the edges or has a tainted history. Wall Street is no different; it has the over-the-counter Bulletin Board. The OTCBB is a place historically wrought with little regulation because the NASD Regulatory bodies oversee market makers but not issuers. Any company can be listed as long as it files updated financial reports with the SEC. In the past, this environment has been fraught with fraud and stock scams. However, activity has picked up in Bulletin Board securities prompting changes in how it operates, it's perception and it's effectiveness for issuers.



The OTCBB "step-child" image has led to a lack of understanding among issuers and some investors. An important reason why this venue is not more often utilized is simply a lack of education among executives about the process and its benefits. The pervading viewpoint among executives is probably that the OTC market is simply composed of the Bulletin Board and Pink Sheets, the latter still burdened with a less than sterling reputation as an obscure corner of the securities market. This however, is not true.



It's important to realize what the over-the-counter market really is and just how prevalent it is in the mainstream investment community. The financial definition of over-the-counter securities refers to securities which are not traded on an exchange. For such securities, broker/dealers negotiate directly with one another over computer networks and by phone, and their activities are monitored by the NASD. The Bulletin Board is but a small part of the OTC environment; there are several components of the OTC widely used by institutions as well as individuals:



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