What is an ‘Over-The-Counter Market’ 什么是OTC市场?

A decentralized market, without a central physical location, where market participants trade with one another through various communication modes such as the telephone, email and proprietary electronic trading systems. An over-the-counter (OTC) market and an exchange market are the two basic ways of organizing financial markets. In an OTC market, dealers act as market makers by quoting prices at which they will buy and sell a security or currency.

The way OTC is structured allows companies the ability to “move up” in the marketplace as they provide better transparency. That market includes:

OTCQX Best Marketplace: for established, global and growth companies (range from blue-chip companies like Roche, Volkswagen and Adidas to growing US and international companies)

OTCQB Venture Marketplace: for entrepreneurial and development stage companies (since last May, companies must be current in their reporting to the SEC, to date there are over 780 verified companies traded).

OTC Pink Open Marketplace: offers trading in a wide variety of securities from SEC reporting companies that are delinquent in their disclosure to foreign companies that limit distribution of disclosure to their home market to financially distressed and dark companies.

Financial portals and online brokerages that display the OTCQX, OTCQB and Pink market designations:

  • CNBC.com
  • Money.CNN.com
  • ETRADE.com
  • FT.com
  • OTCMarkets.com
  • Schwab.com
  • Scottrade.com
  • SeekingAlpha.com
  • Sharebuilder.com
  • SNL.com
  • TDAmeritrade.com
  • Tradeking.com
  • TMX.com

 

The OTCQB Venture Market offers early stage and developing companies the benefits of being publicly traded in the U.S. with lower cost and complexity than a U.S. exchange listing. Streamlined market standards enable SMEs not yet ready for the OTCQX Best Market to provide a strong baseline of transparency to inform and engage U.S. investors.

To be eligible, companies must be current in their SEDAR or SEC reporting and undergo an annual verification and management certification process. Companies must meet $0.01 bid test and may not be in bankruptcy.

As a verified market with efficient access to U.S. investors, OTCQB helps companies build shareholder value with a goal of enhancing liquidity and achieving fair valuation. As a result, more companies are traded on OTC Markets than on NYSE, NYSE MKT and NASDAQ combined.

KEY BENEFITS

Efficient Market Standards: Companies may leverage their SEDAR disclosure (SEC Exchange Act Rule 12g3-2(b)). There are no Sarbanes-Oxley and SEC Reporting requirements to trade on OTCQB, bypassing burdensome, costly and duplicative NYSE and NASDAQ listing requirements.

Transparency: OTCQB is an SEC recognized and a verified market with current company information and financial standards that enable brokers to more easily quote and trade a security.

Visibility: Companies engage a far greater network of U.S. investor, data distributors and media partners, ensuring U.S. investors have access to the same high-quality information that is available to investors in Canada, but through U.S. platforms and portals used to conduct research.