OTC Markets Newsletter - September 2011
September 2011

More Transparency, More Data – A Better Marketplace

OTC Markets Group is dedicated to creating a more transparent and efficient marketplace for investors, broker-dealers and OTC companies. Through our widely-available Market Data distribution network we have made great strides in providing real-time, comprehensive OTC data to the market.

Currently our real-time data is made available by the top online brokers and by the three major financial data providers: Bloomberg, ThomsonReuters, and Interactive Data. Bloomberg users can enter <OTCQ> for more information on OTC Markets Group data. We invite you to view our full list of distributors to see for yourself the breadth of our reach.

These efforts are helping to bring transparency to the OTC marketplace through education and awareness. Later this month, OTC Markets Group data will also be available on the NYSE SFTI network, which provides financial market participants with a single point of connectivity to multiple exchanges and market centers.

If there are any websites, trading platforms, or other services you use that do not make OTC Markets Group data available, please let us know. Tell us what information you want to see and where you want to see it by contacting our Market Data Services team anytime at marketdata@otcmarkets.com.

This month's community member - Steve Roy, Raymond JamesGet to Know Your Community:
Steven Roy, SVP Trading, FIG at Raymond James

This month, we sat down with Steven Roy, SVP of Trading, FIG, at Raymond James. Founded in 1962 and a public company since 1983, Raymond James is a diversified financial services holding company with subsidiaries engaged primarily in investment and financial planning, in addition to investment banking and asset management. For more information, please visit: www.raymondjames.com

Q: Traditionally, many firms used the FINRA OTCBB (Bulletin Board) to quote SEC Reporting and bank stocks. Can you explain why most firms, including Raymond James, have now switched to quoting these companies on OTC Link?
A: We quoted on the Bulletin Board since that was the accepted venue for most of the dealers in the past. The landscape has changed and the simple answer is we moved our quotes over to the OTC Link platform because they provided a more economical way of quoting and maintaining our market making presence for the less visible small cap banks. The fact that a “competitor’’ firm purchased the OTCBB also played a part but it just didn’t make sense to stay quoted in both venues.

Q: What industry or other regulatory changes over the past ten years have most affected your business, either positively or negatively?
A: Where do you start with this question…from a trading perspective, we have been in such a dynamically changing environment that I am ambivalent to it by now. Look back 15 years and the entire framework; structurally and from a regulatory perspective, has gone through a major transformation. I think the biggest regulatory change still goes back to the penny spreads – tightening spreads really hit the trading community hard…once we got through that the rest of the changes were taken “in stride”.
To read the entire interview, click here: www.otcmarkets.com/content/doc/OTCNewsletter/CommunitySeptember2011.pdf.

OTC Market Trade Summary - August 2011

OTC Market Tier # Securities* Monthly $ Volume Avg. Monthly $ Volume
per Security
Market Capitalization
(in Millions)*
OTCQX®: The Quality-Controlled Marketplace 260 $2,326,565,330 $8,948,328 $999,972
OTCQB®: The U.S. Reporting Marketplace 3,659 $2,309,662,460 $631,228 $237,327
OTC Pink:The Speculative Trading Marketplace - Current 2,021 $10,139,173,835 $5,016,909 $11,094,597
OTC Pink Limited Information 834 $622,581,217 $746,500 $25,129
OTC Pink No Information 3,328 $211,086,098 $63,427 $168,720
Totals 10,102 $15,609,068,940 $1,545,146 $12,525,744
* Selected data as of August 31, 2011.

OTC Market Regulation

Market Orders in OTC Equity Securities Subject to Manning Rule - Effective September 12, 2011
FINRA Rule 5320 (“Prohibition Against Trading Ahead of Customer Order”) became effective on September 12, 2011. FINRA Rule 5320 generally provides that a broker-dealer firm that accepts and holds an order in an OTC equity security from its own customer or a customer of another broker-dealer without immediately executing the order is prohibited from trading that security on the same side of the market for its own account at a price that would satisfy the customer order. Implementation of this rule will make market orders in OTC equity securities subject to the Manning Rule. Limit Orders in OTC equity securities have been subject to the Manning Rule since November 11, 2008. Read the full Regulatory Notice here: www.finra.org/Industry/Regulation/Notices/2011/P123670

OTCQX Rule Changes - Effective October 20, 2011
OTC Markets Group has made amendments to the OTCQX Rules, which will become effective October 20, 2011. The proposed rules can be found here: www.otcqx.com/qx/otcqx/rules. A summary description of the proposed changes can be found here: www.otcqx.com/content/doc/qx/Rules/Release/6.pdf.

OTC News

"Finding Good DADs" - Securities Technology Monitor

OTC Events

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

Security Traders Association Annual Meeting (October 12-15, 2011)

Schulte Roth & Zabel - OTC Breakfast (September 14, 2011)

Private Company Stock Conference (September 12, 2011)

2011 North American Securities Administrators Association Annual Conference (September 11-13, 2011)

Fact of The Month

There are over 700 bank securities trading on the OTC marketplace today.

Search for OTC securities using our Stock Screener.

OTCQX - New this Month - New in August

Fifteen companies joined OTCQX in August, bringing the total number of OTCQX companies to 260 as of August 31, 2011.


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

OTC Market Tiers

The top tier of the OTC market - for companies that meet the highest financial standards and undergo a qualitative review.

The middle tier of the OTC market - for companies that report to the SEC or a U.S. banking or insurance regulator.

OTC Pink
The speculative trading marketplace where broker-dealers get the best prices for investors.


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