When originally enacted, the Securities Exchange Act of 1934 banned brokers and dealers from extending margin credit on over-the-counter (OTC) securities. This changed in 1969 when the Exchange Act was amended. The Federal Reserve determined which stocks could be margined and it began publishing in the Federal Register the Official List of OTC Margin Stocks. However, if you look today for the Official List, you won’t find it. That’s because the an amendment to Regulation T in 1998 made all stocks trading in the Nasdaq Stock Market marginable at brokers and dealers. 63 FR 2821, Jan. 16, 1998
The list of OTC margin stocks, however, has not been allowed to ”go gentle into that good night”. More than a decade after the Federal Reserve ceased publication of the list, the California legislature wrote it into Section 17111.o2(b)(1)(A)(ii) of the California Revised Limited Liability Company Act. That’s actually an important provision because it defines “dissenting interest”. I can only guess how much time will be wasted in fruitless searches for the current list of OTC margin stocks.
How We Got From “A to O” to “A to Z”
The ancient Greeks adapted their alphabet from the Phoenician alphabet. The order of the letters within the alphabet was arbitrary but began with Alpha (?) and ended with Omega (O). The sixth letter of the Greek alphabet was Zeta (Z). The Greeks liked to trade with the Etruscans, a people who inhabited northwest Italy. The Etruscans created an alphabet for their non Indo-European language based on the Greek alphabet. The future Romans, who were initially ruled by the Etruscans, borrowed the Etruscan alphabet to write their own Indo-European language (nascent Latin). Early Latin didn’t have much use for the letter Z and it lost its place near the beginning of the Latin alphabet. Later, the Romans began to borrow Greek words and needed the Z. So, they tacked the Z on the end of their Latin alphabet. Thus, the beginning to the end is now A to Z. The word “alphabet” comes from the first two letters of the Greek alphabet Alpha (A) and Beta (?).