OTC Market

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Over the Counter Markets

An over-the-counter (OTC) market is a signifies a platform where market participants trade stocks, commodities, currencies, or other instruments directly between themselves without and exchange or broker.

In the securities arena, the OTC Markets Group provides price and liquidity information for almost 10,000 over-the-counter (OTC) securities. The group has its headquarters in New York City. OTC-traded securities are organized into three markets to inform investors of opportunities and risks: OTCQX, OTCQB and Pink.

The OTC Markets Group, designates securities in one of three markets to indicate the level of financial and corporate disclosure provided by the companies using its quotation system. Apart from the OTCQX market, which has rules that include financial requirements, the designations do not signify issuer quality or merit of any security. Designation is based on the level and timeliness of a company’s disclosure and OTCQB and any of the Pink categories can include both high quality as well as speculative, distressed, or questionable companies. Strict promotion policies have been enacted to flag these companies and deny their application for trading if they engage actively in campaigns marked by misleading information or manipulative promotions.

The OTCQX and OTCQB markets are considered ‘Established Public Markets’ by the SEC for the purpose of determining the public market price when registering securities for resale with the SEC in equity line financings. OTC Markets Group can facilitate electronic trading with its SEC-registered Alternative Trading System known as OTC Link® ATS.

Mark J. Astarita is a veteran securities attorney who represents investors and financial professionals nationwide in securities investigations and arbitrations. Have a question? Email him at mja@sallahlaw.com or call his office at 212-509-6544.

Portions of this article are based on content from https://en.wikipedia.org/wiki/OTC_Markets_Group

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