10 Years of The OTCQX!
2017 marks the 10th anniversary of the OTC Markets’ QX tier. Ten years later, the OTCQX has grown from 12 companies to 399 domestic and global issuers (461 securities), representing a combined $1.4 trillion in market capitalization. Today, OTCQX securities trade $36.8 billion in annual dollar volume, nearly 20% of the total annual dollar volume of all OTC securities.
The OTCQX is an integral part of the OTC Markets’ history. The QX was one of the first steps in OTC Market’s journey to becoming the premier alternative market in the US and world.
In 2007, when OTC Markets Group was still known as Pink Sheets, LLC, the OTCQX was launched to provide issuers with many of the benefits of a traditional U.S. exchange listing without the associated costs and burdens.
With an emphasis on disclosure, the QX brought with it the “DAD” (designated advisor for disclosure) and “PAL” (initially “Proposing Advisor for Listing” and now “Principal American Liaison”) requirements.
At the time, OTCQX issuers were offered “A Suite of Unparalleled Products and Services” including; Real-time Level II quotes on otcqx.com and pinksheets.com, and Identified participation in Pink Sheets upcoming stock forum and company Q&A for real-time shareholder communication.
Continued Disclosure Initiatives by OTC Markets
The OTCQX was the first step of Pink Sheet, LLC’s disclosure project that intended to separate issuers into categories based on the level of disclosure they provided.
In April 2007, all non-OTCQX Pink Sheets companies were categorized and labeled under one of the following categories:
– Emerging Equity List (now the QB)- audited financials, background checks, attorney letter regarding disclosure, management certification, open to companies with no or nominal assets such as shells, SPACs, business developments companies, EEL logo on quote.
– Adequate Current Information (now the Pink Current Info)- reviewed financials, attorney letter, management certification.
– SEC Current (OTCBB), current SEC filer, but no attorney letter or management certification.
– Limited Information Available (yield sign)- limited information published in the last 6 months, yield sign on quote.
– No Info (stop sign)- All other Pink Sheets traded stocks, stop sign on quote.
– Stocks with SPAM (skull & crossbones)- promotion, or other public interest concerns will have a skull and crossbones logo.
OTC Markets Beats the Bulletin Board (OTCBB)
In a recent blog post, Matt Fuchs (EVP of Market Data at OTC Markets Group) declared that “The OTC Bulletin Board is Dead”. Currently the OTCBB is home to “102 securities out of the 9,705 quoted OTC securities” and the OTCBB website (www.OTCBB.com) shut down in 2014.
In 2006, the OTCBB was home to over 3,000 listed issuers (compared to Pink Sheets, LLC’s 4,700). You might say that the OTCXQ was one of the first major actions taken by the OTC Markets in its quest for alternative exchange dominance as today the OTC Markets are home to approximately 10,000 securities!
For a flash back to 2006, check out this presentation from Ellenoff Grossman & Schole LLP discussing the new OTCQX titled “A New Gateway To US Markets“.
In honor of OTCQX’s 10-year anniversary, OTC Markets Group will be celebrating OTCQX on their website, newsletter, on social media and at events throughout 2017. #QXTurnsX!