This excerpt taken from the NDAQ 10-K filed Mar 15, 2006.
Other Products and Markets
On September 2, 2005, Nasdaq executed the OTC Bulletin Board Agreement with NASD related to the OTCBB, an electronic screen-based quotation service for securities that, among other things, are not listed on The Nasdaq Stock Market or any U.S. national securities exchange. Under the OTCBB Agreement, effective October 1, 2005, Nasdaq transferred responsibility for the OTCBB back to NASD. This transfer is designed to address concerns expressed by the SEC regarding our continuing to operate the OTCBB after our registration as a national securities exchange. Consideration for the OTCBB Agreement is NASDs agreement to outsource the operation of the OTCBB to Nasdaq for an initial two year period, subject to one year renewals upon mutual consent. NASD will pay Nasdaq $14.2 million in the first year and $14.7 million in the second year for Nasdaqs services under the OTCBB Agreement.
This excerpt taken from the NDAQ 10-K filed Mar 14, 2005.
Other Products and Markets
Nasdaq Insurance Agency, LLC. We operate The Nasdaq Insurance Agency, LLC (NIA), which provides insurance brokerage services and specializes in the directors and officers liability insurance market. On January 1, 2005, we acquired the 50% of NIA that we did not already own from a wholly-owned subsidiary of American
International Group, Inc. Prior to January 1, 2005, Nasdaq accounted for its investment in NIA under the equity method of accounting.
OTC Bulletin Board. The OTC Bulletin Board is an electronic screen-based market for equity securities that, among other things, are not listed on The Nasdaq Stock Market or any primary U.S. national securities exchange. The OTC Bulletin Board is only a quotation service without any execution facilities. Companies do not list on the OTC Bulletin Board; rather, NASD members may post quotes only for companies that file periodic reports with the SEC and/or with a banking or insurance regulatory authority. In addition, these companies are required to be current with their periodic filings. Market makers are charged a fee per position and are billed based on their number of positions during a month. A position is defined as any price quotation or indication of interest entered by a market maker in a security quoted on the OTC Bulletin Board. There are no fees charged to companies whose securities are quoted on the OTC Bulletin Board. Revenues generated from the OTC Bulletin Board are included in Market Services revenues.
The Nasdaq Board of Directors and NASD Board of Governors are considering whether Nasdaq will continue to operate the OTC Bulletin Board after exchange registration or whether the OTC Bulletin Board will be transferred to NASD or another entity. In order to operate the OTC Bulletin Board after exchange registration, Nasdaq would need to enter into listing agreements with OTC Bulletin Board issuers or to receive an exemption from certain SEC listing requirements that apply to national securities exchanges. We believe that such an exemption is authorized under the Exchange Act, but it is unclear whether the SEC would grant such an exemption were Nasdaq to request it. As a result, it is not certain whether Nasdaq will continue to operate the OTC Bulletin Board following exchange registration.