Minimum Quotation Size Requirements for OTC Equity Securities

All firms making markets in over-the-counter (OTC) Equity Securities have obligations pursuant to NASD® Rule 6750 (Minimum Quotation Size Requirement) regarding minimum quotation size. The Minimum Quotation Size Requirement provides that every member firm that functions as a Marker Maker in OTC securities enter firm quotations into the OTC Bulletin Board® (OTCBB), or any other inter-dealer quotation system that permits quotation updates on a real-time basis. The firm must honor those quotations for the minimum size defined in the table below.

A Nasdaq officer at the Executive Vice President level or above, within its discretion, may modify the minimum quotation size for those securities with a price exceeding $200. It is the Market Maker's responsibility to determine the minimum size applicable to its firm bid or offer in any security for which it functions as a Market Maker and enters firm quotations in an inter-dealer quotation system. In addition to the OTCBB, the Electronic Pink Sheets is such an inter-dealer system. Thus, any firm that functions as a Market Maker in an OTC Equity Security by entering firm quotations into the Electronic Pink Sheets must comply with the size requirements described above. This requirement applies only to market makers entering priced quotations. Market makers are permitted to enter unpriced indications of interest in the OTCBB which are not held to the minimum quotation size standard.