The OTC market is made up of many different types of companies, ranging from OTCQX companies that strive to be worthy of investor consideration to economically distressed companies to speculative shell companies. The below chart explains the different OTC market tiers.
OTCQX and International OTCQX are Elite OTC market tiers that set apart a select group of issuers as worthy of consideration by U.S. investors. Qualified issuers use the efficient and robust OTCQX listing process to provide credibility and visibility of disclosure to investors.
|The highest tier for international exchange listed companies that are able to meet the financial qualifications of the NYSE's Worldwide Listing Standards. International PremierQX provides a mechanism for companies to make their home country disclosure available in English to U.S. investors rather than via duplicative SEC reporting requirements.|
|The highest tier for U.S. companies that trade over-the-counter, PremierQX identifies issuers that are able to meet the financial requirements of NASDAQ's Capital Market continued listing standards. PremierQX provides a credible disclosure process for companies that choose not to be SEC-reporting or, for SEC reporting companies, a more reputable platform for growth or a spring board to a NASDAQ listing.|
|This tier identifies those companies that are listed on an international exchange but are not of sufficient size to list on International PremierQX.|
|Identifies issuers that have ongoing business operations with audited financials and management review, but not of sufficient size to be on PremierQX.|
|Identifies securities that are quoted on both the Pink Quote system and the OTCBB. While all OTCBB securities must be SEC reporting and current in their reporting obligations there are no operational or management standards the OTCBB also includes development stage and shell companies. More than 96% of all OTCBB securities are dually quoted on the Pink Quote system as our Pink Link messaging system allows market makers to electronically trade OTC securities.|
|This security is quoted solely on the OTCBB quotation systems so market makers must use the telephone to make any trades.|
|Reporting companies that submit filings to regulators with powers of review and that make the filings publicly available or non-reporting companies that make current information publicly available through the OTC Disclosure and News Service pursuant to Pink OTC Markets' Guidelines for Providing Adequate Current Information (pdf). The Current Information category is based on the level of disclosure and is not a designation of quality or investment risk. This category includes shell or development stage companies with little or no operations as well as companies without audited financials and as such should be considered extremely speculative by investors.|
|Designed for companies with financial reporting problems, economic distress, or in bankruptcy to make the limited information they have publicly available. The Limited Information category also includes companies that may not be troubled, but are unwilling to meet Pink OTC Markets' Guidelines for Providing Adequate Current Information. Companies in this category have posted limited financial information not older than six months through the OTC Disclosure and News Service, or have made a filing on the SEC's EDGAR system in the previous six months.|
|Indicates companies that are not able or willing to provide disclosure to the public markets - either to a regulator, an exchange or Pink OTC Markets. Companies in this category do not make Current Information available via the OTC Disclosure and News Service, or if they do, the available information is older than six months. This category includes defunct companies that have ceased operations as well as 'dark' companies with questionable management and market disclosure practices. Publicly traded companies that are not willing to provide information to investors should be treated with suspicion and their securities should be considered highly risky.|
|There are no market makers in this security. It is not listed, traded or quoted on any stock exchange, the OTCBB or the Pink Sheets. Trades in grey market stocks are reported by broker-dealers to their Self Regulatory Organization (SRO) and the SRO distributes the trade data to market data vendors and financial websites so investors can track price and volume. Since grey market securities are not traded or quoted on an exchange or inter-dealer quotation system, investor's bids and offers are not collected in a central spot so market transparency is diminished and Best Execution of orders is difficult.|
|Buyer Beware. There is a public interest concern associated with the company, which may include a spam campaign, questionable stock promotion, known investigation of fraudulent activity committed by the company or insiders, regulatory suspensions, or disruptive corporate actions. During the time it is labeled Caveat Emptor, any stock that is not in the Current Information category will also have its quotes blocked on pinksheets.com.|
Enter the symbol of the stock you interested in at Pink Sheets Website and you can find out what tier it belongs to.