Pink OTC Markets

Pink OTC Markets Inc. is a privately owned company based in New York City that provides a suite of products and services for the U.S. over-the-counter (OTC) securities market. The company operates electronic quotations, trading, messaging, and information platforms (including Pink Quote, an electronic quotation service formerly referred to as the Pink Sheets) used by participants in the OTC securities market. According to the U.S. Securities and Exchange Commission, Pink OTC Markets is "not" a stock exchange in and of itself, like the NYSE. The company simply facilitates the exchange of securities between qualified independent brokers.

History

Pink OTC Markets Inc. was first established in 1913 as The National Quotation Bureau (NQB). For decades, the NQB reported quotations for both stocks and bonds, publishing the quotations in the paper-based Pink Sheets and Yellow Sheets respectively. The publications got their names from the color of paper they were printed on, and they became integral tools for both OTC dealers and investors. In 1997, the NQB came under a new management team that was dedicated to using technology to improve services offered to customers. In September 1999, the NQB introduced the Electronic Quotation Service, an internet based real-time quotation service for OTC stocks and bonds. In June of 2000, NQB changed its name to Pink Sheets LLC and introduced [http://www.pinksheets.com www.pinksheets.com] , a financial web portal for information about OTC securities trading and issuers. [ [http://www.pinksheets.com/pink/about/history.jsp Company History] ]

In April 2008, Pink Sheets LLC announced that it changed its name to Pink OTC Markets Inc. “The name change reflects both the company's conversion from a Delaware limited liability company to a Delaware corporation and more accurately communicates the company's position as a technology and financial information provider for the U.S. Over-the-Counter securities markets.” [ [http://www.pinksheets.com/pink/about/news.jsp Company Name Change Press Release] ]

Products

The company operates Pink Quote, its inter-dealer electronic quotations system, and Pink Link, its inter-dealer messaging system, which enable market makers to connect electronically and publish bid and ask quotes and related information and negotiate executions in OTCQX, OTCBB, and Pink Sheets securities. This information is then disseminated on a real-time basis to a network of over 230 Financial Industry Regulatory Authority (FINRA) broker-dealers.

Regulatory status

Pink OTC Markets is considered a non-exclusive Securities Information Processor (or "SIP") within the meaning of the Securities Exchange Act of 1934. A SIP is defined as a person engaged in the business of "(i) collecting, processing, or preparing for distribution or publication, or assisting, participating in, or coordinating the distribution or publication of, information with respect to transactions in or quotations for any security (other than an exempted security), or (ii) distributing or publishing (whether by means of a ticker tape, a communications network, a terminal display device, or otherwise) on a current and continuous basis, information with respect to such transactions or quotations." [ [http://www.law.uc.edu/CCL/34Act/ Securities Exchange Act of 1934] ] Pink OTC Markets is neither an SEC registered stock exchange nor a FINRA Broker-Dealer.

OTC Market Tiers

The U.S. OTC market is made up of over 8,800 securities that range from strong, trusted companies worthy of investor consideration to troubled or highly questionable companies that should be avoided by investors. Securities quoted for trading in the OTC market are classified into four tiers — OTCQX, OTCBB, Pink Sheets, or Grey Market. Pink OTC Markets enables investors to consider this diverse group of securities by using an easy-to-understand tiered system that categorizes all OTC companies based on their level of disclosure. [ [http://www.pinksheets.com/pink/otcguide/investors_market_tiers.jsp Company Market Tier Information] ]

Companies that demonstrate their commitment to investors through enhanced market transparency and timely disclosure, have on-going business operations, and meet Pink OTC Markets’ listing requirements are eligible to list on OTCQX or International OTCQX, the premier OTC market tier. OTCQX is the only highly visible electronic trading venue in the U.S. that does not require Securities and Exchange Commission (SEC) registration.

All other companies are categorized based only on their ability and willingness to provide current disclosure to the market. Pink OTC Markets classifies companies as providing "Current Information," "Limited Information," or "No Information." In addition, companies whose stock is the subject of a spam campaign or other public interest concern are placed into the Caveat Emptor or "Buyer Beware" category. Companies categorized as "Current Information" provide adequate current information in accordance with Pink OTC Markets' guidelines or that are current in their required reports to a regulator, such as the SEC, FDIC, or a qualified exchange. Companies categorized as "Limited Information" have financial reporting problems or are in economic distress that cannot or choose not to provide current disclosure. Companies categorized as "No Information" are dark and defunct companies that do not provide disclosure to the public markets — either to a regulator, an exchange or Pink OTC Markets.

References

External links

* [http://www.pinksheets.com Official Website]
* [http://www.otcqx.com OTCQX Site]
* [http://www.sec.gov/answers/pink.htm SEC Information about Pink OTC Markets]
*cite web|url=http://www.law.uc.edu/CCL/34Act/|title=Securities Exchange Act of 1934|publisher=University of Cincinnati College of Law