Circa Pict. & Prod. Co. Intnl Inc. (fka CPPD)

[ron2w]

Loosely on-topic as well as mighty interesting in general in the longer term (Found on another board): - Ron

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http://www.investrend.com/FiX031402.htm

"LITTLE BOARD GROWS UP. NASD is about to kill the OTCBB. Get ready for T3.

SEC Reading Room reveals 'Enhanced Bulletin Board' is coming.
http://www.sec.gov/news/headlines/adv-marchround.htm

The much-maligned OTCBB has grown from a daily volume of 29m shares with $100m market volume since its introduction in 1990 to more than 400m shares and $400m market volume today. OTCBB data is now fed into more than 450,000 Level I terminals. Since 1993, all trades have been reported in real-time, and since January, 1999, every company trading on the OTCBB must be a reporting entity. On Feb. 8, 2001, the SEC approved a proposal prohibiting member firms from trading ahead of customer limit orders.

Today, some 3,800 companies are traded by nearly 300 marketmakers, quoting an average of 39,000 positions daily. All MMs subscribing to Nasdaq Level 3 service and in compliance with SEC Rule 15c2-11 are eligible to "voluntarily" participate in the OTCBB and may enter or exit at will. With 26m small businesses in the U.S., the number of companies choosing the liquidity of public equities is still miniscule.

A further breakdown shows 475 banks, 28 insurance companies and 3,265 companies trading, although 25% of the OTC companies have financial SIC codes. The largest company on the OTCBB was Publix Super Markets with a $9b market cap and $15b in revenues. Heroes, Inc., as of November, 2001, was the smallest, with a $302k market cap and revenues of $6.5m. Some 2,000 OTCBB companies have an average market cap of $1m or less. Some 42% of all trades are made in the top 100 OTCBB securities. The top 500 total 74% and the top 1,000 have 88% of the total. Likewise, 10 MMs handle 83.2% of the total trades.

In 1998, Investrend participated in and helped organize a "Bulletin Board" roundtable for the SEC Corporate Finance and Market Regulation staff and NASD, NASDR and the Nasdaq officers and capital market practitioners. Since that time, many of those participants have continued to work in an Advisory Committee to develop better practices. A meeting is scheduled this Friday in Austin, Texas.

Documents on file in the SEC Reading Room reveal that this committee has been quite busy. If all goes as planned, in January, 2003, a new "third-tier" -- or T3 -- issuer market operated by the NASD will begin, and by December, 2003, the OTCBB as we know it will be history. At that time, Nasdaq believes 2,000 qualifying OTCBB companies will be left, and the remainder will be relegated to the Pink Sheets.

As part of the transformation, qualifying small issuers will need to meet defined listing standards and pay listing fees. Minimal governance standards will require that companies must have at least 100 shareholders who own at least 100 shares each, and 200,000 shares in the public float. Also, the auditor must be subject to peer review, the company will need to issue an annual report, there will have to be an annual shareholder meeting with proxies and a quorum of at least 1/3rd of the shareholders present in person or by proxy.

Listed companies will need at least one independent director and there must be an independent audit committee with a majority of independent directors. Certain transactions will require shareholder approval, and rules will be in effect to prohibit voting restrictions.

Because Nasdaq has applied to the SEC to become an "exchange," some of the committee's ideas have already been vetted at the SEC and set aside as not acceptable. The major rejections had to do with trading on margin -- which will become a thing of the past in all Nasdaq markets if and when it becomes an exchange -- and the SEC is adamantly opposed to the elimination of the penny stock rules for the proposed T3 Exchange.

Although Nasdaq requires three independent directors on boards of its listed companies, due to the high cost of maintaining D&O insurance, T3 companies will be required to have only one independent director. Shareholder approval will be required for granting stock options to officers or directors, the issuance of large, below-market blocs of stock, and changes of control."