Within the OTC Markets Group monthly newsletter, there is an interesting announcement on OTC Market Regulation & Compliance.
| FINRA Rule 6433
On August 5, 2012 FINRA announced that the SEC-approved amendments to FINRA Rule 6433 (Minimum Quotation Size Requirements for OTC Equity Securities) will become effective on November 5, 2012. This has been approved as a 1 year pilot period. The new quotation sizes are as follows:
For full details of this announcement, please see: FINRA Regulatory Notice 12-37. |
So what does this mean to the average investor? Well, if there is a penny stock out there, the minimum order you can place is 10,000 shares, which equates to $1.00. Would anyone ever place a market order for $1? Not a retail buyer since a retail buyer’s stock trade fee wold be at $10 (Schwab or Ameritrade) and then there are market fees of probably $2 on top of that. On the market maker side though, you would see trades as small as this because their fees are much smaller.
© 2012 by Rhodes Holdings LLC, all rights reserved except excerpts from the FINRA notice.
