The Financial Industry Regulatory Authority has proposed changes to its inter-dealer quotation system referred to as the “OTC Bulletin Board Service.” Specifically, FINRA is proposing to rename the service as the “Over-the-Counter Display Facility,” or “ODF.” The ODF will be expanded to include any over-the-counter equity security instead of limiting the service to securities from “reporting company” issuers.
The proposal also would allow FINRA to disseminate inside bid-ask quotations where there is a single one-sided priced quote or where there is only one market maker displaying a two-sided priced quote. (The current rule provides that a bid-ask calculation is accessible only where the security has at least two market makers displaying two-sided priced quotes.) FINRA also is proposing to eliminate the current position fee applicable to quoting on the service.
Under the proposal, member firms that are deemed “active market participants” would be required to participate in testing with the FINRA quotation facility. For these purposes, an “active market participant” would include any member firm that, on average, displays quotations in at least 500 symbols per day in aggregate across member inter-dealer quotation systems during a six-month period.
More information is available here.