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.
 

BREAKING DOWN '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. OTC Markets Group Inc.

    The owner and operator of the leading U.S. inter-dealer electronic ...
  2. Advanced Company (TSX Venture)

    An issuer listed on Canada's TSX Venture exchange that has significant ...
  3. Tier 3 Capital

    Tertiary capital held by banks to meet part of their market risks, ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context ...
  5. OTCQB

    The venture stage marketplace for smaller or early-stage companies ...
  6. Real Estate Tier Classifications: ...

    Cities are categorized as Tier I, Tier II, or Tier III depending ...
Related Articles
  1. Personal Finance

    What's Tier 2 Capital?

    Tier 2 capital is a category of supplementary capital that banks hold.
  2. Investing

    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. Personal Finance

    Is Your Bank On Its Way Down?

    Find out how the Tier 1 capital ratio can be used to tell if your bank is going under.
  4. Personal Finance

    Explaining Tier 1 Capital

    Tier 1 capital refers to the core capital a bank must maintain in relation to its assets.
  5. Financial Advisor

    The Most Crucial Financial Ratios For Penny Stocks

    Given adequate financial disclosure, investors can use some of the same financial ratios for valuing blue chip stocks to evaluate penny stocks.
  6. Personal Finance

    Explaining the Tier 1 Leverage Ratio

    The Tier 1 leverage ratio measures a bank’s core capital against its total assets.
  7. Insights

    Getting To Know The Stock Exchanges

    Here are the answers to all the questions you have about stock exchanges but are too afraid to ask!
  8. 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.
  9. Small Business

    Understand the SEC Rules on Equity Crowdfunding

    The SEC's adoption of equity crowdfunding rules, initiated under the JOBS Act, enables small investors to invest in companies that show early potential.
  10. Personal Finance

    Calculating the Tier 1 Capital Ratio

    The Tier 1 capital ratio is a measure of a depository financial institution’s financial health and capital adequacy.
RELATED FAQS
  1. What is the difference between tier 1 capital and tier 2 capital?

    Learn what tier 1 capital and tier 2 capital, the differences between them, and how to calcu, alate a bank's capital ratio. Read Answer >>
  2. What is a "pink sheet" in the context of an OTC (over-the-counter) transaction?

    Read about pink sheets, the electronically driven over-the-counter market in which broker-dealers connect to trade the stock ... Read Answer >>
  3. How can I calculate the tier 1 capital ratio?

    Learn about the tier 1 capital ratio, what the ratio indicates about a firm's capital adequacy and how to calculate a firm's ... Read 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 Answer >>
  5. How can I calculate the leverage ratio using tier 1 capital?

    Learn about the tier 1 leverage ratio, how to calculate the tier 1 capital ratio and what this leverage ratio indicates about ... Read Answer >>
  6. Are over-the-counter stocks different from other stocks?

    Explore the difference between stocks traded over-the-counter and those listed on the NYSE or Nasdaq. Learn how price affects ... Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center