All you need to know in depth about the OTC Markets Group - Part 2

OTC markets are used for wholesale transactions between institutional intermediaries

by Lorenzo Ciotti
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All you need to know in depth about the OTC Markets Group - Part 2

OTC markets are used for wholesale transactions between institutional intermediaries. OTC trading, as well as exchange trading, occurs with commodities, financial instruments (including stocks), and derivatives of such products.

Products traded on traditional stock exchanges, and other regulated bourse platforms, must be well standardized. This means that exchanged deliverables match a narrow range of quantity, quality, and identity which is defined by the exchange and identical to all transactions of that product.

This is necessary for there to be transparency in stock exchange-based equities trading.Negotiations take place informally, through bilateral conversations between the parties, by telephone or electronically.

In depth about the OTC Markets Group

OTC Markets Group remains committed to working with the SEC to ensure market transparency and foster investor protection, while providing critical infrastructure for the broker-dealer community.

In compliance with Rule 15c2-11, quotes in securities without information available (“Pink No-Information” securities) have shifted to OTC Markets Group’s Expert Market. Quotes in the Expert Market will be "Unsolicited Only." OTC Markets Group’s trading platform is regulated by FINRA and the SEC.

FINRA, the regulator of all broker-dealers, is also the self-regulatory organization (SRO) that oversees the OTC equities market. OTC Link LLC is a FINRA member broker-dealer and operates OTC Link®ATS, an SEC-regulated alternative trading system subject to, among other things, the SEC’s Regulation Systems Compliance and Integrity.

All activity on our markets is conducted by SEC registered, FINRA-member broker-dealers and is subject to state and federal securities laws. OTCQX and OTCQB are recognized by the SEC as established public markets. OTC Markets Group’s tiered-markets approach reflects our commitment to investor protection and the importance of disclosures across platforms.

Data-driven disclosure standards and real-time compliance data feeds increase transparency. Compliance flags signal the need for further scrutiny. Referrals assist the SEC in enforcing federal securities laws and holding wrongdoers accountable.

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