OTC MarketThe General Practitioner of Michigan (2012)
AbstractEvery private company should consider the advantages and disadvantages of going public when promoting the growth of their operations and earnings. Because of the benefits a public company can offer, a company should consider taking their company to this next stage of growth and the various avenues to do so. The most known and prestigious stock exchanges, such as NASDAQ and NYSE, are catered to larger and more established companies, however, there are trading boards available for smaller companies as well which encompass many of the large stock exchange characteristics. The over the counter (OTC) market provides an alternative for companies that do not wish to be listed on a U.S. stock exchange or do not meet the relevant listing requirements to do so. The OTC market has a wide range of companies which are assigned a Market Tier based on how the company chooses to do its disclosures and how established the company is; these tiers include OTCQX, OTCQB and OTC Pink. OTC Pink is the bottom tier of the OTC market. It is a speculative trading marketplace that helps broker-dealers receive the best prices for investors. OTCQB is the middle tier of the OTC market and was created in 2010 to help investors identify OTC-traded companies that report to the SEC or a U.S. banking regulator. Prior to OTCQB, the OTC Bulletin Board was designated for this purpose but now only 5% of all OTC priced quotes are published there. The top tier of the OTC market is OTCQX which represents a trillion dollars of market capitalization.
Publication DateWinter January, 2012
Citation InformationTiffany C. Walsh. 2011. "OTC Market", The General Practitioner of Michigan (2012).