The National Quotation Bureau (NQB) is a company established in 1913 to compile and publish price information on stocks and bonds traded in the over-the-counter (OTC) market. The National Quotation Bureau was formed by financial book publisher Arthur F. Elliot and financier Roger Ward Babson.
NQB was sold to Commerce Clearing House in 1963, which sold it in 1997 to a group of investors led by Cromwell Coulson. In 1999, the NQB introduced its real-time Electronic Quotation System for trading OTC securities, completing its transition from the print medium to the electronic one. The NQB was renamed Pink Sheets LLC in 2000, which in turn became Pink OTC in 2008. Eventually it changed the name to OTC Market Group, Inc. in 2011.
The National Quotation Bureau was one of the prime originators of the ubiquitous “Pink Sheets", since it published stock information on pink paper and bond data on yellow sheets. Pink sheets refer to price quotes on over the counter shares, which are not listed and traded on traditional stock exchanges.
NQB’s roots date back to 1904, when Roger Babson – the founder of Babson College – founded a statistical organization that compiled and disseminated bond offering circulars in a monthly publication to brokerage houses in New York, Boston, Chicago and other financial centers. Meanwhile, Arthur Elliot had started a firm in 1911 that daily compiled price and volume data from brokerage offices that were active in the over-the-counter market. The two complementary services subsequently merged to form the National Quotation Bureau.
While it may be hard to appreciate the fact in the present era of free real-time quotes and instant information, the NQB provided a very valuable service more than a century ago by packaging scarce data and making it available to dealers and investors. In doing so, it also sidestepped the virtual monopoly that entities such as the New York Stock Exchange (NYSE) and American Stock Exchange (AMEX) had on price data and its dissemination through ticker tape and other means.
The reason that “Pink Sheets” become virtually synonymous with more speculative OTC securities, despite its illustrious and well-respected founders, is not entirely clear. Historically, OTC and listed shares were considered equally risky and legitimate. Over time, it may have been largely due to the preference over the years of most companies to be listed on an exchange – rather than trade OTC – because of the increased transparency and liquidity available on stock exchanges.