The BBX
Frequently Asked Questions (Updated July 19, 2002)
When will the BBX launch?
The Bulletin Board ExchangeSM (BBXSM) is scheduled to launch in the second quarter of 2003, pending approval by the Securities and Exchange Commission (SEC).
Who is eligible to apply to the BBX?
Any company with publicly traded securities is eligible to apply to the BBX.
How do I obtain an application, and when will the BBX start accepting them?
The BBX is currently working with the SEC to obtain regulatory approval for the BBX. Until we receive SEC approval, we will not be accepting applications. Once we are able to accept applications, we will immediately make them available on the BBX website as well as send out application kits in the mail to all current OTCBB issuers and parties who have requested them.
What will happen to the OTC Bulletin Board?
The current OTC Bulletin Board® (OTCBB®) will be replaced by the BBX. To ensure a smooth transition to a listed-market environment for OTCBB companies, Nasdaq will continue to operate the OTCBB for six months after the BBX launches. There will not be any simultaneous trading on the OTCBB and BBX. Once an issue is listed and traded on the BBX, it will no longer trade on the OTCBB.
What will happen to OTCBB securities that are not listed on the BBX?
OTCBB securities that do not transition to the BBX or any other listed market will continue to be traded on the OTCBB for six months after the launch of the BBX. At that time, market makers may choose to move their positions in those securities to the PinkSheets.
How does a company list on the BBX?
In order to be listed on the BBX, all issuers, including OTCBB issuers, will be required to submit a listing application. Applications will be mailed to OTCBB issuers and those who have requested to be on our mailing list. They will also be posted on the BBX website. If you would like to be included on our mailing list, please send an email to bbxinfo@bbxchange.com.
What are the listing qualifications for BBX?
The proposed BBX listing requirements have been created to provide an opportunity for the largest number of current OTCBB issuers to continue trading in the new listed environment, while at the same time offering a full complement of qualitative standards to provide enhanced protection to investors. Under these listing requirements, companies must meet qualitative standards, but do not have to meet financial or minimum share price standards. Specifically, the BBX proposal will require:
Public interest standards identical to those currently utilized for Nasdaq National Market® (NNM) and SmallCap® market, which will provide the BBX with the discretion to deny listing or de-list an issuer for the purpose of protecting investors and the integrity of the market;
A requirement of 100 round-lot shareholders and 200,000 shares in the public float; and
Corporate governance standards similar to those imposed by the NNM and SmallCap markets, with an adjustment to the independent director and audit committee requirements in recognition of the difficulty small companies may have meeting these requirements.
The proposed BBX listing standards are available on the BBX website.
Will companies listed on the BBX have new trading symbols?
All issuers will be required to choose a new symbol for their BBX security. The symbol naming convention will be as follows: two letters, XB, followed by three alpha characters of the company’s choice, for a total of five letters in each symbol. Requests for trading symbols will be submitted as part of the listing application and symbols will be assigned on a first-come-first-serve basis. For more information on trading symbols, refer to the BBX trading symbol section of this website.
Will banks be required to file public reports?
Yes. Banks will be required to meet the same listing requirements as other issuers, including filing periodic reports with the SEC, as required by the Exchange Act of 1934.
How can I learn more about the BBX?
OTCBB issuers and other interested parties are invited to attend information forums to discuss the listing qualifications, application process, and BBX marketplace rules. Forums are being scheduled for several locations around the country. Once it has been finalized, the forum schedule and agenda will be available on the BBX website. If you would like to be updated with the latest BBX developments via email, please sign up to be on our distribution list.
What is the definition of an Independent Director?
The BBX proposes to use the definition of an independent director as set forth in Rule 4200(a)(14) of the NASD Manual Marketplace Rules.
What are the requirements for the composition of the audit committee?
The proposed rule filing states that the audit committee must not be comprised of a minority of independent directors. Therefore, if your company has only one independent director, your audit committee may consist of a maximum of two people – in this case, one independent director and one non-independent director.
What is the 100 round lot shareholder requirement?
Each company must have at least 100 round lot shareholders. One round lot is equal to 100 shares. Restricted shares may qualify for the calculation of round lots.
What are the costs associated with being listed on the BBX (in comparison to the OTCBB)?
Unlike the OTCBB, the proposed BBX will be a listed market. BBX issuers will be required to pay both initial and annual listing fees to be on the BBX. For more information on these fees, please refer to the BBX Issuer Fees. In addition, there may be costs associated with meeting some BBX qualifications, such as costs associated with being current in SEC filings and meeting certain corporate governance requirements.
Will there be any rules regarding short selling on the BBX?
Yes. Market makers will be required to report their short interest positions on a monthly basis. These reports will be available on the BBX website. Additionally, BBX market participants must comply with the NASD rule regarding affirmative determination, which requires that a short seller determine that he can borrow the shares before he completes the short sale transaction.
Will issuers be required to go through a market maker to list on the BBX? Will market makers file 15c2-11 forms on behalf of BBX issuers?
No, issuers will not be required to go through a market maker to list on the BBX. Each issuer will apply for listing directly to the BBX. Market makers will not submit a form 15c2-11 for trading securities on the BBX. Market makers will continue to quote and trade in BBX securities;therefore, applicants will be required to have at least one market maker agree to maintain a quote in its security once it is listed on the BBX.
Where can I find a list of market makers?
A list of market makers that currently make markets in OTCBB stocks is available on the OTCBB website.
Who owns the BBX?
The BBX is owned and operated by The Nasdaq Stock Market®.
If you don't have the time to do something right, where are you going to find the time to fix it?
-Stephen King
