Stocks: Over-the-Counter Price Reform

The nation's lively, loosely organized over-the-counter market is the only showcase for the securities of many companies that do not want or do not rate listing on the New York or other big exchanges. As it is, the showcase has some built-in distortions. One of them, singled out by the Securities and Exchange Commission in its 1963 study, is that the "asked" prices of over-the-counter stocks as provided by dealers to the daily press are traditionally jacked up by a percentage — usually around 2% but sometimes 5% — that represents the dealers' profit.

In Big Board practice, actual stock...

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