Since Renee liked what I wrote, she asked me to go ahead and post it.
The SEC is indeed cleaning up the OTC. The proposed changes reflect this. I agree, based on what I read from the document, that the onus of responsibility for vetting the authenticity and credibility of these OTC companies is on the broker/dealers. If the final proposal has some teeth in it, the broker/dealers will face legal ramifications if they fail to abide by the proposal to actually vet these scammy OTC companies in which they make markets.
At present, any registered company that is delinquent faces a suspension and eventual revocation. No chance in becoming a non registered entity when that happens.
As for current non registered companies, the proposal says the broker/dealers must require current financials as well as other pertinent up to date information.
One result could be that it makes it harder for a scammer to gain custody of a shell or zombie ticker then attempt to merge it into a private company through a reverse merger. The broker/dealers, for example, could refuse to make a market for a merger into a company that was only created three weeks ago and has no verifiable operating history. No more mergers of dead companies into imaginary companies, in other words.
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