The Securities and Trade Fee is beefing up protections towards fraud and manipulation within the flippantly regulated marketplace for over-the-counter shares.
The SEC on Wednesday accredited a change to its guidelines that might largely forestall brokers from quoting costs for OTC shares until the businesses issuing such shares launched up-to-date monetary info to the general public.
That may make it more durable for particular person traders to commerce shares of OTC firms which have gone “darkish,” which means they’ve stopped releasing their financials. In flip, that might make it more durable for would-be swindlers to make use of such shares in schemes concentrating on small traders.
OTC shares aren’t listed on an trade such because the New York Inventory Trade or the Nasdaq Inventory Market. Many are so-called penny shares, or shares of tiny firms that commerce for lower than $5 a share.