Over-the-Counter Market Quotations

Chapter VII of the Report of Special Study of Securities Markets of the Securities and Exchange Commission focused attention upon the little understood and often perplexing problems presented by the quotations for over-the-counter stocks which appear regularly in the newspapers-the so-called retail quotations system. The Report was quite critical of the existing retail quotations system, concluding that it was inconsistent with the general philosophy of full disclosure elsewhere applied in the administration of the federal securities laws and, in fact, operated “to conceal what elsewhere in the securities business is considered essential to be disclosed.” While there does not appear to be unanimity in the securities industry with respect to the efficacy of the system, it is vigorously defended by its supporters as important, if not essential, to the business survival of smaller over-the-counter dealers and to the liquidity of the markets in many securities. It seems clear, therefore, that the problem warrants the attention which it will undoubtedly receive, both from the National Association of Securities Dealers (NASD) and from the Securities and Exchange Commission.