OTC Markets Group facts for kids
 |
|
| Public | |
| Traded as | OTCQX: OTCM |
| Industry | Financial services |
| Predecessor | National Quotation Bureau, Pink Sheets, Pink OTC Markets |
| Founded | 1913 (as National Quotation Bureau) |
| Headquarters |
300 Vesey Street, New York City, New York
,
U.S.
|
|
Key people
|
R. Cromwell Coulson (president, CEO and director) |
| Revenue |  US$ 105.1 million (2022) |
|
Operating income
|
US$ 36.8 million (2022) |
| US$ 30.8 million (2022) |
|
| Total assets | US$ 89.6 million (2022) |
| Total equity | US$ 29.8 million (2022) |
| Divisions | OTC Link ATS, Market Data Licensing, Corporate Services |
OTC Markets Group, Inc. is a company in New York City, USA. It helps people buy and sell company shares that are traded over-the-counter (OTC). This means these shares are not listed on big stock exchanges like the New York Stock Exchange or NASDAQ.
OTC Markets Group provides information for almost 12,400 different company shares. They organize these shares into three main markets. This helps buyers know about the chances and risks involved. These markets are called OTCQX, OTCQB, and Pink.
Contents
How OTC Markets Group Started
The company began a long time ago, in 1913. It was first known as the National Quotation Bureau (NQB). For many years, the NQB shared prices for both shares and bonds. They printed these prices on special paper. Share prices were on pink paper, and bond prices were on yellow paper. This is why they were called "Pink Sheets" and "Yellow Sheets."
In 1999, the NQB started sharing prices online in real-time. This was a big step forward! The company changed its name a few times. First, it became Pink Sheets LLC in 2000. Then, it was Pink OTC Markets in 2008. Finally, in 2010, it became OTC Markets Group, which is its name today.
Today, many different broker-dealers (people who buy and sell shares for others) use the OTC Markets platform. They help set prices and trade a wide variety of shares.
Who Trades on OTC Markets?
Many different types of companies use OTC Markets. Some are big foreign companies that want to reach buyers in the U.S. They often do this using something called American depositary receipts (ADRs).
Also, many smaller U.S. companies trade here. These might be family-owned businesses or very new companies. They might not trade many shares each day.
Some companies on OTC Markets do not have to share their financial reports with the U.S. government (the U.S. Securities and Exchange Commission or SEC). However, many choose to do so. This helps buyers get more information.
The SEC warns that some shares on the lower-tier Pink market can be very risky. This is because some companies there do not share regular financial reports. It can be hard for buyers to find reliable information about them. The SEC advises people to research these companies very carefully before buying their shares.
Understanding the Markets
OTC Markets Group puts shares into three different markets. This shows how much financial information a company shares. It also shows how often they share it. These markets do not always mean a company is good or bad. They mainly show how open a company is with its information.
The OTCQX and OTCQB markets are seen as 'Established Public Markets' by the SEC. This means they are more trusted for certain types of share sales. OTC Markets Group also has a special electronic trading system called OTC Link ATS. This system helps make trading easier and faster.
OTCQX: The Top Tier
The OTCQX market is for strong companies. This includes big international companies and growing U.S. companies. To be on OTCQX, companies must be reviewed by OTC Markets Group. They must also share their financial information with OTC Markets Group.
U.S. companies on OTCQX must be real businesses, not just "shell companies" (companies with no real operations). Foreign companies must meet rules of their home country's stock exchanges. Also, companies on OTCQX need a special sponsor, like an investment bank or law firms, to help oversee them.
As of 18 October 2023[update], there were 658 companies trading on OTCQX. About 478 were international companies, and 180 were U.S. companies.
OTCQB: The Venture Market
The OTCQB market has a rule that shares must trade for at least one cent ($0.01). This helps remove companies that might be part of share fraud schemes.
Companies on OTCQB must also confirm their information every year. A top leader, like the CEO or CFO, signs a document saying their company details are up-to-date. This includes information about their reports, leaders, major owners, and advisors. Having more information helps buyers feel more confident.
As of 18 October 2023[update], there were 1,216 companies trading on OTCQB.
OTCQX and OTCQB: Blue Sky Status
Some states have "Blue Sky Laws." These are rules to protect buyers from share fraud. They often require companies selling shares to register and share financial details.
Because the SEC sees OTCQX and OTCQB as established markets, many states now accept them. This means it's easier for brokers to recommend shares from these markets to their clients. This is similar to how they recommend shares on big national stock exchanges.
Pink: The Open Market
The Pink market is an open market with fewer rules. Companies here do not have to register their shares with the SEC. These companies are grouped by how much and how often they share information. Some share current information, while others share very little.
Pink Current
Companies that send in regular reports (every three months and yearly) are in the Pink Current category. However, this group can still include "shell companies" or very new companies with little business. Some might not have their financial reports checked by an auditor.
As of 18 October 2023[update], there were 6,705 companies in the Pink Current category.
Pink Limited
Companies that have shared information within the last six months are in the Pink Limited group. These companies might have problems with their financial reports or be in financial trouble. They might not share information as often as the Pink Current companies.
As of 18 October 2023[update], there were 3,684 companies in the Pink Limited category.
Expert Market
This market is for companies that do not want to share their information with the public. The information they do share might be older than six months. This group can include companies that have stopped working or "dark" companies. These companies might have unclear leaders or strange ways of sharing information.
Shares in this market are considered very risky. Their prices are hidden from the public. This market used to be called "Pink No Information."
As of 18 October 2023[update], there were 3,342 companies in the Expert Market.
Caveat Emptor: Buyer Beware
Sometimes, a company is marked "Caveat Emptor." This is Latin for "buyer beware." It means there are concerns about the company. This could be because of spam emails, unusual share promotions, or worries about fraudulent activities. If a company is marked "Caveat Emptor" and doesn't share current information, its prices might be blocked from public view on the OTC Markets website.
Grey Market
Some shares are not listed on any stock exchange. They are also not formally listed on OTC Markets. These shares are part of the "grey market." If someone wants to buy or sell these shares, they do it directly. The trades are then reported to a special group that shares the data. The grey market is also called OTOTC.
As of 18 October 2023[update], there were 1,426 companies in the grey market.
Images for kids
-
OTC Markets Group logo
