The Pink Sheets are coming of age in perhaps one of
better moves they've made in years. As a continuing effort to create more transparent and efficient OTC markets, Pink Sheets LLC, announced launch of Pink Sheets News Service, an innovative publishing tool for OTC issuers last October. The news service allows issuers to publish in real-time their news releases and financial reports on www.pinksheets.com, leading source of information for OTC Markets.Some on Wall Street speculate that PLINK was developed in response to changes taking place at Bulletin Board's new BBXchange (www.bbxchange.com) which was slated to open in January and is now delayed until end of year as regulators debate its rules and governance.
The BBX is a proposed new marketplace that will eventually take place of OTC Bulletin Board (OTCBB). The BBX will appeal to many of same companies that are currently quoted on OTCBB, but will be a higher quality market. These changes, while an advantage to many companies, are also a call to action for Pink Sheets if it is to compete.
When BBX does go into affect many companies will not elect to join, instead they're expected to move to Pink Sheets were reporting requirements are not as strict.
What's prompting those decisions are rules relating to corporate governance that require audit committees and more independent directors. For smaller companies costs associated with complying to those rules are too much to bare. Instead, many will elect to switch to Pink Sheets.
With many companies undecided on switching exchanges, some on Wall Street speculate that Mr. Coulson's move into expanding his services at that time were very coincidental to his desire to gain market share over BBX. Some brokers believe it took opportunity rather than integrity to see Pink Sheets LLC finally offer a means for brokers and shareholders alike to access news and information. Axcess Business News wonders if Mr. Coulson would have been so quick to announce Plink had he known BBX's launch would be delayed.
Cromwell Coulson, Chairman & CEO of Pink Sheets LLC, in a press release issued Oct 16 2002 said, "OTC issuers will now be able to reach their stock holders and interested public with their corporate information and investors will be empowered to make more informed decisions. By improving availability of information, we hope to bolster integrity and growth of OTC markets."
Investor concerns over lack of information about companies that trade in Pink Sheets has been growing for some time and while those latest improvements were well received, to some its not enough. Mr. Ian Park, a college student in Florida who had been swindled in a penny stock scheme was frustrated over lack of concern by regulators - and Mr. Coulson, to improve OTC market's reporting requirements. He formed a grass roots organization he called "Project Penny" and began soliciting Securities and Exchange Commission, NASD and Mr. Coulson to consider adopting more stringent disclosure rules.
Mr. Coulson was quoted in response to Ian Park's plea for help as stating, "I agree that it is important for regulators to review rules applying to OTC trading as part of BBX becoming a listed exchange and there are areas which should be improved immediately, such as immediate need for short position reporting and disclosure for all OTC equities, but more importantly, regulators should put in place a process to deal with needs that arise over time."
