Sunday, April 22, 2012 7:38:30 PM
Investors Information ~ Investing in OTC Securities
There is a wide range in the quality of issuers whose securities are traded Over the Counter (OTC) - from major international conglomerates to very small, highly speculative companies. Therefore, investors should conduct thorough research prior to making an investment decision. A good starting point for research is the OTC market tier structure – which quickly indicates the level and timeliness of information available for OTC companies.
The OTC Tier System
All OTC securities are assigned a market tier based on their reporting method (SEC Reporting, Alternative Reporting Standard) and disclosure category – Current, Limited or No Information. Securities listed on OTCQX, the highest tier of the OTC market, are required to have Current disclosure and meet minimum financial qualifications. Securities in OTCQB tier must be SEC, Bank or Insurance reporting and must be Current in their disclosure.
Securities in the OTC Pink (also known as Pink Sheets) market tier are further divided, based on the amount and timeliness of their financial disclosure, into three categories:
Current Information - 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 on the OTC Disclosure and News Service pursuant to OTC Markets Guidelines for Providing Adequate Current Information.
Limited Information – Companies that have limited financial information not older than six months available on the OTC Disclosure and News Service or have made required filings on the SEC's EDGAR system in the previous six months.
No Information - Companies that are not able or willing to provide disclosure to the public markets - either to a regulator, an exchange or OTC Markets.
Companies that are deemed to have a public interest concern associated with them due to stock promotion, disruptive corporate actions, legal proceedings are classified by OTC Markets as Caveat Emptor (Buyer Beware).
Please see the OTC market tier section for more information.
http://www.otcmarkets.com/otc-101/investing-otc-security
There is a wide range in the quality of issuers whose securities are traded Over the Counter (OTC) - from major international conglomerates to very small, highly speculative companies. Therefore, investors should conduct thorough research prior to making an investment decision. A good starting point for research is the OTC market tier structure – which quickly indicates the level and timeliness of information available for OTC companies.
The OTC Tier System
All OTC securities are assigned a market tier based on their reporting method (SEC Reporting, Alternative Reporting Standard) and disclosure category – Current, Limited or No Information. Securities listed on OTCQX, the highest tier of the OTC market, are required to have Current disclosure and meet minimum financial qualifications. Securities in OTCQB tier must be SEC, Bank or Insurance reporting and must be Current in their disclosure.
Securities in the OTC Pink (also known as Pink Sheets) market tier are further divided, based on the amount and timeliness of their financial disclosure, into three categories:
Current Information - 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 on the OTC Disclosure and News Service pursuant to OTC Markets Guidelines for Providing Adequate Current Information.
Limited Information – Companies that have limited financial information not older than six months available on the OTC Disclosure and News Service or have made required filings on the SEC's EDGAR system in the previous six months.
No Information - Companies that are not able or willing to provide disclosure to the public markets - either to a regulator, an exchange or OTC Markets.
Companies that are deemed to have a public interest concern associated with them due to stock promotion, disruptive corporate actions, legal proceedings are classified by OTC Markets as Caveat Emptor (Buyer Beware).
Please see the OTC market tier section for more information.
http://www.otcmarkets.com/otc-101/investing-otc-security
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