RE: Ming ManHere's a little more info re: otc-bb
https://www.otcbb.com/news/2001/GeneralNews/lopstocks.stm
Text of what this means!
By Darrell Nether
Published by OTCBB News Network
03/23/2001
On February 8, 2001, the SEC approved the Limit Order Protection Pilot for the OTC
Bulletin Board (OTCBB). The rule change will, for a 12 month pilot period, prohibit Market
Makers from "trading ahead" of customer limit orders that a member accepts in securities
quoted on the OTCBB. Members handling customer limit orders are prohibited from
trading at prices equal or superior to that of the customer limit order without executing the
limit order.
The impetus for this rule (commonly known as the "Manning Rule") was a case brought by
a customer of a member firm, William Manning, who alleged that the firm had accepted
his limit order, failed to execute it, and violated its fiduciary duty to him by trading ahead of
the order. In the Manning decision,[7] the NASD found, and the Commission affirmed, that
a member firm, upon acceptance of a customer's limit order, undertakes a fiduciary duty
to its customer and cannot trade for its own account at prices more favorable than the
customer's order. Although at one time the NASD took the position that its members
could trade ahead of customer limit orders provided they disclosed such practice to the
customer,[8] NASD IM-2110-2 eliminated this disclosure "safe-harbor" for all securities
listed on Nasdaq.
Highlights of this rule change are as follows:
Price Improvement - Members cannot avoid this obligation through price improvement
unless such price improvement is for a minimum of $0.05 or one-half the inside spread,
which ever is less.
Contemporaneous Execution - A member that trades through a customer limit order must
execute that order contemporaneously - as soon as possible but in no case later than 5
minutes after the member has traded at a price more favorable than the customer's price.
Order Size - The limit order protection will extend up to the size of the limit order as long
as it does not exceed the size of the proprietary trade.
Pilot Securities - 325 OTCBB securities will be subject to this rule during the pilot study. A
complete list of these securities will be posted on OTCBB.com as soon as it is available.
During the pilot study, all subject securities will be identified with a "##" following the
security name on the Nasdaq Workstation II. The securities selected for the pilot will be
chosen so that the OTCBB can test the effects of Limit Order Protection on a wide range
of securities. 200 of the most actively traded securities will be included. An additional 100
securities will be selected from a cross section of all remaining securities. The remaining
25 securities will be selected on a case-by-case basis after the pilot begins, likely from
securities delisted from Nasdaq or an exchange.
Implementation - Within 30 days of SEC approval, the NASD will issue a Notice To
Members describing the new rule.
Click out this link to view the complete SEC approval order: SEC Approval Order