OTCQX

AAA

DEFINITION of 'OTCQX'

The top tier of the three marketplaces for trading over-the-counter stocks provided and operated by the OTC Markets Group. The OTCQX forum offers the best marketplace of these three tiers for companies that fulfill qualification criteria. To qualify for an OTCQX listing, a company must meet high financial standards, be current in its disclosure and be sponsored by a professional third-party advisor.
 

INVESTOPEDIA EXPLAINS 'OTCQX'

 
The OTCQX roster includes a large number of blue chips from Europe, Canada, Brazil and Russia that are global household names.
 
The reason for those large and prestigious companies to list on the OTCQX, rather than on a reputed exchange such as the NYSE, is mainly to avoid the high costs associated with listing shares on a large U.S. exchange. Another reason is to avoid the expenses incurred in meeting the stringent ongoing disclosure and legal requirements associated with maintaining the listing. In contrast, the application fee for international and U.S. companies that meet the OTCQX requirements is much smaller.
 
A U.S. company that fulfills additional requirements, such as a minimum bid price of $1 for the preceding 90 business days and meeting the financial criteria for continued listing on the Nasdaq Capital Market, would be eligible for the OTCQX U.S. Premier Tier. This tier is designed to identify large, high-quality issuers that would qualify to list on a national stock exchange. The comparable tier for overseas companies is the OTCQX International Premier, which is reserved for foreign companies that meet certain qualifications of the NYSE’s worldwide standards.

The OTCQX Marketplace provides a number of advantages to investors. It separates out the superior companies from the numerous OTC companies that are either financially challenged or are involved in questionable activities or both. It enables investors to participate in the growth of foreign blue chips. As well, investors can view real-time Level 2 quotes with detailed market data and market depth.
 

RELATED TERMS
  1. Dotcom Bubble

    An rapid rise in equity markets fueled by investments in internet-based ...
  2. Taiwan OTC Exchange (TWO) .TWO

    An alternative securities exchange in Taiwan with listing criteria ...
  3. Delisting

    The removal of a listed security from the exchange on which it ...
  4. Pink Sheets

    A daily publication compiled by the National Quotation Bureau ...
  5. Over-The-Counter - OTC

    A security traded in some context other than on a formal exchange ...
  6. Over-The-Counter Bulletin Board ...

    A regulated electronic trading service offered by the National ...
RELATED FAQS
  1. Can investors short sell pink sheet or over-the-counter stocks?

    Short selling is an effective trading strategy that can be employed to hedge the risk of a loss on an off-setting position ... Read Full Answer >>
  2. What does it mean when a stock trades on the Pink Sheets or the OTCBB?

    The stocks of well-known companies such as General Electric and Microsoft trade on major exchanges such as the New York Stock ... Read Full Answer >>
  3. What are the steps to get a company listed on the OTCBB?

    The over-the-counter bulletin board (OTCBB) is a regulated quotation service for over-the-counter (OTC) securities. The securities ... Read Full Answer >>
  4. How does a company move from an OTC market to a major exchange?

    The over-the-counter market is not an actual exchange like the NYSE or Nasdaq. Instead, it is a network of companies that ... Read Full Answer >>
  5. What is a "pink sheet" in the context of an OTC (over-the-counter) transaction?

    In the over-the-counter (OTC) market, pink sheets are daily publications with bid and ask prices of over-the-counter stocks. ... Read Full Answer >>
  6. What are the SEC (Securities And Exchange Commission) rules about OTC (over-the-counter) ...

    Market trades that occur over the counter (OTC) are less regulated by the Securities and Exchange Commission than those that ... Read Full Answer >>
Related Articles
  1. Investing

    The Over-The-Counter Market: An Introduction To Pink Sheets

    Being early to a party may not be hip, but being early on a rising stock certainly is.
  2. Investing Basics

    How To Play The OTC Pink Stocks

    The OTC Pink offers a variety of investment candidates including many good companies waiting to be discovered. Recently, the OTC Pink has worked hard to improve the service by tiering companies ...
  3. Investing Basics

    The Dirt On Delisted Stocks

    Listed securities are "the cream of the crop". Find out how a firm can lose that status and why you should be wary.
  4. Investing Basics

    Digging For Profitable Delistings

    Deregistration can provide opportunities for savvy investors. We'll show you how to cash in.
  5. Investing Basics

    OTCBB and OTC Markets Group

    The majority of larger companies that trade publicly choose to list their stocks on one of the major exchanges - the NYSE or Nasdaq. However, many companies are unable to meet the financial or ...
  6. Investing Basics

    Use Caution Trading Pink Sheet Stocks

    Pink Sheets stocks offer exciting opportunities to increase portfolio returns by large magnitudes in a short time. However, these opportunities come with significant risks. Investors need to ...
  7. Investing

    The Risks & Rewards of Penny Stocks

    Penny stocks can make you a lot of money in a short period of time, but this is a very dangerous game that almost always will leads to losses.
  8. Investing News

    Should You Invest In Fannie Mae Stock?

    If you're risk-adverse, you might want to avoid investing in Fannie Mae. But if you're up for it, high risk could translate to high reward.
  9. Insurance

    Credit Default Swaps: What Happens In A Credit Event?

    The credit crisis of 2008 prompted important changes to the settlement of credit default swaps.
  10. Investing

    Spot Hotshot Penny Stocks

    Don't flip a coin to find your next investment.

You May Also Like

Hot Definitions
  1. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  2. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  3. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  4. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  5. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  6. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!