Public stock issues not traded on any domestic stock exchange are traded in the OTC market. The OTC market is a negotiated market, whereas most stock exchanges are auction markets. The National Association of Securities Dealers (NASD) represents thousands of brokers and dealers who trade OTC stocks. Since 1970, the prices of over 5,000 of the more than 40,000,000 OTC issues have been reported through the National Association of Securities Dealers Automatic Quotation System, called NASDAQ. The NASDAQ system consists of two areas: the National Market System and the OTC market. The National Market System (NMS) comprises so-called Tier 1 OTC stocks, a select part of the OTC market whose issues meet higher volume and price requirements than the remainder of the OTC market. http://cftech.com/BrainBank/FINANCE/NASDAQ.html
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