Over-the-Counter Markets

The National Association of Securities Dealers (NASD) was registered in 1938 as a national securities association under Section 15A of the Securities Exchange Act of 1934 and regulates broker-dealers that operate in the over-the-counter (OTC) market. Many equity securities, corporate bonds, government securities, and certain derivative products are traded in the OTC market. The OTC Bulletin Board and the Pink Sheets, for example, operate within the OTC market.

OTC Bulletin Board

The OTC Bulletin Board (OTCBB) is an electronic inter-dealer quotation system that displays real-time quotes, last-sale prices, and volume information for many over-the-counter securities that are not listed on a national securities exchange. The NASD oversees the OTCBB.

Under the OTCBB's eligibility rule, companies that want to have their securities quoted on the OTCBB must file current financial reports with the SEC or with their banking or insurance regulators. For more information, you may view the OTCBB's website at www.otcbb.com.

Pink Sheets

The "Pink Sheets" is an electronic inter-dealer quotation system that displays quotes and last-sale information for many OTC securities. The name "Pink Sheets" comes from the color of paper used when the sheets circulated in hard copy. The Pink Sheets are published by Pink Sheets LLC, a privately held company. Pink Sheets LLC is not registered with the SEC.

The Pink Sheets does not require companies whose securities are quoted upon its systems to meet any listing requirements. With the exception of a few foreign issuers, the companies quoted in the Pink Sheets tend to be closely held, extremely small and/or thinly traded. Most do not meet the minimum listing requirements for trading on a national securities exchange. Many of these companies do not file periodic reports or audited financial statements with the SEC. As such, it may be difficult for the public to find current, reliable information about companies quoted through the Pink Sheets. For further information, you may view the Pink Sheets' website at www.pinksheets.com.

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