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OTC Markets Newsletter November 2012

FINRA Reduces Minimum Quote Size Requirements

On November 12, FINRA amended Rule 6433, which reduces the minimum quote sizes that broker-dealers are required to display on our OTC Link® ATS and decreases the number of price-based minimum sizes from nine to six. The Rule was instituted for a one-year pilot period.

Original Tier Sizes

Price (Bid or Offer) Minimum Quote Size
(# of Shares)
0–.50 5,000
.51–1.00 2,500
1.01–10.00 500
10.01–100.00 200
100.01–200.00 100
200.01–500.00 25
500.01–1000.00 10
1000.01–2500.00 5
2500.01 + 1

 

New Tier Sizes

Price (Bid or Offer) Minimum Quote Size
(# of Shares)
$0.0001 to $0.0999 10,000
$0.10 to $0.1999 5,000
$0.20 to $0.5099 2,500
$0.51 to $0.9999 1,000
$1.00 to $174.99 100
$175.00+ 1

FINRA believes that lowering minimum quote sizes will allow more investor orders to be displayed and decrease spreads. The risk is that lowering minimum quote sizes will result in a decrease in total displayed liquidity. Rules regarding quote sizes and price increments are controversial topics for market participants. In the JOBS Act, Congress has called for the SEC to study increasing minimum price increments in trading of smaller companies because of the perceived lack of displayed liquidity due to penny increments.

Implementing Rule 6433 as a pilot program allows the SEC to gather data before making a long-term decision as to whether the potential benefits of increased limit order display ultimately balance the risk of a potential reduction in overall liquidity. As the operator of Open, Transparent and Connected financial marketplaces, we support making market structure changes as pilot programs to facilitate the adequate data collection and analysis necessary to make informed regulatory decisions.

One thing we can be sure of is that the smaller inside quote sizes will make access to Real-time Level 2 Quotes even more important for investors seeking to monitor the complete depth-of-book information for the 10,000 OTCQX, OTCQB and OTC Pink securities that trade on OTC Link ATS. Real-time Level 2 Quotes provide investors with increased price transparency and are freely available on www.otcmarkets.com for companies that sponsor them for their investors.

We encourage you to contact us to tell us your thoughts on and experiences from this rule change as we continue to work to ensure that the OTCQX, OTCQB and OTC Pink marketplaces offer efficient trading at the best possible price, empowering a broad range of companies to improve the quality and availability of information for their investors.

For full details of this announcement, please see: FINRA Regulatory Notice 12-37.

To learn more about Real-Time Level 2 Quotes, click here. For a full list of companies that sponsor Real-Time Level 2 quotes for their investors, click here.

OTC Events

OTC Markets Group has attended or will be participating in the following events to educate investors, broker-dealers, and OTCQX, OTCQB and OTC Pink companies about our marketplaces.

The DealFlow Conference 2012 (Dec. 18, 2012)

MZ Group ADR Conference – “Globalize your Outreach” (Dec. 11, 2012)

IR Magazine Awards & Conference – Greater China 2012 (Dec. 11, 2012)

IR Magazine Awards & Conference – South East Asia 2012 (Dec. 6, 2012)

LD Micro Conference (Dec. 5-6, 2012)

West Coast Wall Street Conference – Jobs Act and Crowdfunding Workshop (Nov. 19, 2012)

ClearTrust LLC Dodd-Frank Breakfast (Nov. 9, 2012)

AGC Partners’ Annual East Coast Conference (Oct. 16-17, 2012)

4th Annual Depositary Receipt Issuers' Conference (Oct. 12-14, 2012)

IR Magazine Think Tank – Canada 2012 (Oct. 10, 2012)

2012 Angel Capital Association (ACA) Leaders Workshop (Oct. 4-5, 2012)

Contact us if you are interested in meeting us at one of these events.

Market Data Updates

Real Time Level 1 and Level 2 Quote Information: Citadel LLC, a leading U.S. broker-dealer, became a distributor of Real-Time Level 1 and Level 2 quote information to their customers.

RSS Feeds: ADVFN, a leading provider of information to the retail investment community, began incorporating OTC Markets Group’s RSS feed across its various platforms.

OTC Link® ATS: Over 99% of all priced OTC quotes are now found on the OTC Link® ATS, with less than 1% of priced quotes on the FINRA OTCBB.

OTC Product Updates

OTC Markets Group Partners with PR Newswire

OTC Markets Group (OTCQX:OTCM) has partnered with PR Newswire to help OTCQX, OTCQB and OTC Pink companies widely disseminate company news, target new investors and mitigate compliance risk. Companies can now broadcast their news through OTC Markets Group’s OTC Disclosure & News Service directly on the OTCIQ.com portal, as well as through PR Newswire’s expansive network, which includes local, national and Reg. FD compliant news portals.

Click here to learn more.

OTC Markets News

OTCM’s Daniel Brasier speaks to BNN about OTCQX and the impact of Hurricane Sandy (Oct. 30, 2012)

OTC Market To Undergo Structural Changes - Traders Magazine (Sept. 19, 2012)

OTC Markets Group to Provide Level 2 Data on Nearly 10,000 OTCQX, OTCQB and OTC Pink Securities Through the FactSet Platform (Sept. 18, 2012)

Ex-Amex Topper Joins Board of OTC Markets Group - Traders Magazine (Sept. 13, 2012)

OTC Markets Group Names Neal Wolkoff and Louisa Serene Schneider to the Board of Directors (Sept. 11, 2012)

OTC Markets Monthly Trade Summary - October 2012

OTC Marketplace # Securities* Monthly Dollar Volume Monthly Dollar Volume
per Security
Aggregate Market Capitalization
(in Millions)*
OTCQX® 401 $1,745,030,800 $4,351,698 $1,235,233
OTCQB® 3,453 $2,038,547,103 $590,370 $175,949
OTC Pink® Current Information 2,450 $4,835,108,615 $1,973,514 $10,841,799
OTC Pink Limited Information 532 $156,159,661 $293,533 $12,876
OTC Pink No Information 3,127 $152,819,670 $48,871 $29,965
Totals 9,963 $8,927,665,849
$7,257,986 $12,295,822
* Selected data as of October 31, 2012.

OTCQX Case Study - LiqTech

Read about why LiqTech (OTCQX: LIQT) decided to upgrade from OTCQB to OTCQX and how it leverages OTCQX to provide the best informed and most efficient marketplace for its investors: Click here to read more.

LiqTech

OTCQX - New this Month - New Additions

16 companies joined OTCQX in September and October.

A complete list of OTCQX companies is available on www.otcqx.com.

OTC Marketplaces

OTCQX
The intelligent marketplace for the best OTC companies with the highest financial standards and superior information availability.

OTCQB
The venture marketplace for companies that are current in their reporting with a U.S. regulator.

OTC Pink
The open marketplace for a wide spectrum of equity securities.

For questions, please contact OTC Markets Group.
www.otcmarkets.com • 212-430-3690 • info@otcmarkets.com

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© 2012 OTC Markets Group Inc.