OTC Markets Group Reports 2018 Trading Statistics and Highlights

NEW YORK, Jan. 17, 2019 /PRNewswire/ — OTC Markets Group Inc. (OTCQX: OTCM), operator of financial markets for 10,000 U.S. and global securities, today announced its trading statistics and news highlights for 2018.

2018 Highlights:

  • Total dollar volume of OTCQX®, OTCQB® and Pink® securities was $375.2 billion compared to $246.7 billion in 2017.
  • Dollar volume of OTCQX, OTCQB and Pink companies that provide current information to investors was $369.2 billion, representing 98% of total dollar volume across all markets and demonstrating continued progress in using data-driven standards to incentivize OTC issuer disclosure for investors and brokers. 
  • Seventy companies graduated from the OTC markets to a national stock exchange, 45 of which came from the OTCQX and OTCQB markets.
  • Built on the Launch of OTC Link ECN, gaining traction with new subscribers and increasing market share  
  • Introduced new OTC Compliance Analytics Data points including Stock Promotion, Shell Risk and “Hot Sector” information
  • Launched Small Cap Listed Compliance product which focuses on sub $500 million market cap exchange-listed issuers
  • Expanded the Transfer Agent Verified Shares Program with 36 SEC registered transfer agents participating in the program and providing investors with current share information on over 94% of domestic OTCQX® and OTCQB® companies 
  • Continued Focus on Regulatory Initiatives; Blue Sky Exemptions gain momentum with disclosure standards recognized by a growing majority of states: OTCQX exempt in 33 states under Blue Sky secondary trading rules; OTCQB exempt in 30 states
  • OTC Markets Group Named to Crain’s 2018 List of the Best Places to Work in New York City

Summary of Trading Statistics by Market for 2018 Versus 2017
The table below presents the number of securities included in each market as of December 31, 2018 and 2017 and the total dollar volume traded in each market during 2018 and 2017.

# of Securities as of
December 31

Year End
December 31, 2018

Year End
December 31, 2017

Market

2018

2017

$Volume
(Millions)

% of Total
Volume

$Volume
(Millions)

% of Total
Volume

OTCQX Best Market

464

425

$63,202

16.85%

$55,891

22.66%

OTCQB Venture Market

993

998

$24,846

6.62%

$22,696

9.20%

Pink Current Information

6,111

5,915

$281,136

74.94%

$163,269

66.19%

Pink Limited Information

211

216

$544

0.15%

$1,551

0.63%

Pink No Information

2,686

2,803

$5,442

1.45%

$3,273

1.33%

Totals

10,465

10,357

$375,171

100.00%

$246,679

100.00%

 

The total dollar volume of OTCQX, OTCQB and Pink securities increased 52% to $375.2 billion. OTCQX securities traded $63.2 billion in 2018, representing 16.9% of total overall dollar volume during the year.

OTC Markets Group continued to outperform other leading global venture markets in terms of the number of graduates to a stock exchange in 2017.  Seventy companies graduated from the OTCQX, OTCQB and Pink markets to a national securities exchange in 2018, 45 of which came from the OTCQX and OTCQB markets.  In comparison, 12 companies graduated from Canada’s TSX Venture Exchange to the Toronto Stock Exchange in 2018 and 4 companies graduated from London’s AIM market to the London Stock Exchange.

Launch of OTC Link ECN
Last year, OTC Markets Group introduced the new OTC Link ECN which provides OTC equity traders with additional liquidity, an anonymous orderbook and full integration with OTC Link ATS.  OTC Link ECN allows for additional broker dealers to provide liquidity in OTC traded securities.  This year, OTC Link ECN has gained traction and increased its market share.

Expanding the Breadth of Market Data Distribution with Enhanced OTC Compliance Analytics Products
OTC Markets Group continued to expand its market data distribution network in 2018, with an increase in the number of firms using OTC Markets Group data files to assess risk and provide greater investment opportunities in OTCQX, OTCQB and Pink securities.

Over the past 12 months, OTC Markets Group launched a number of enhancements to its Market Data products including the recent release of “Hot Sector” information to its award-winning OTC Compliance Analytics product. The new “Hot Sector” categorization joins the earlier additions of Shell Risk and Promotion Data to the Compliance Analytics product launched in 2018 and builds upon efforts to provide market professionals and investors with increased market transparency. These products continue to gain acceptance across the industry and provide broker-dealers, investors, managers and compliance professionals with the data sets they need to automate and establish turnkey compliance processes, identify operational risk, and better address market-wide challenges.

In September 2018, building on its leadership role to establish market standards and educate issuers in the small cap space, OTC Markets Group launched a first of its kind Small Cap Listed Compliance Product helping to standardize and improve analysis of 1800+ small cap securities listed on U.S. Stock Exchanges. This new product allows firms to enhance their due diligence for analyzing securities across the listed and OTC equity small cap market–providing end users with a more streamlined approach for evaluating the significant number of small cap listed securities. The file also provides comprehensive active and historical stock promotion data for small cap listed securities.

Collectively, these market data initiatives reinforce OTC Markets Group’s ongoing efforts to dynamically identify and flag risks so that broker-dealers can redline bad actors and questionable affiliates, provide better information, enhance investor protection and ensure a fair market pricing process.

Broadening the Scale of the Transfer Agent Verified Shares Program
Our Transfer Agent Verified Shares program reached new milestones at the end of 2018, with 36 SEC registered transfer agents participating, providing investors with current share information on over 94% of domestic OTCQX and OTCQB companies and 54% of domestic Pink companies. OTC Markets Group continues working to engage additional transfer agents to improve the availability of share information for Canadian companies and domestic Pink companies.

Launched in October 2016, the program is designed to provide investors with current and reliable share data on OTCQX, OTCQB and Pink securities. The Transfer Agent Verified Shares program enables stock transfer agents to report their clients’ share data, including authorized and outstanding shares, to OTC Markets Group on a regular basis via a secure, electronic file transfer and provide timely information for market participants on share issuance and dilution. 

Regulatory Initiatives and Blue Sky Exemptions Remain Key Priorities
In December 2018, the SEC completed rules to allow for the official implementation of Reg A+. The new rules help SEC reporting companies use Reg A.  As a precursor, the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155) in May 2018, marked a pivotal milestone for small cap companies and issuers, as it included key legislation that expanded Regulation A+ to SEC reporting companies and was based in large part upon OTC Markets Group’s 2016 SEC Petition for Rulemaking.

On the regulatory front, OTC Markets Group continues to focus on gaining additional regulatory recognitions—working with national and state regulators and advocating for the needs of our issuers and brokers to facilitate more efficient capital formation. On a national scale, OTC Markets Group continues to work with individual state regulators and the North American Securities Administrators Association (NASAA) to achieve Blue Sky exemptions for securities on the OTCQX and OTCQB markets.   These exemptions are based in large part on the disclosure that OTCQX and OTCQB companies make available on the OTC Markets website.  In July, NASAA announced a proposed model rule that would recognize OTC Markets Group as a “securities manual” with respect to securities on the OTCQX and OTCQB markets, based on the robust and timely disclosure these companies provide. The proposed model rule, if adopted would help additional states streamline their respective Blue Sky requirements and recognize the OTCQX and OTCQB markets.  As of December 31, 2018, OTCQX securities are exempt in 33 states and OTCQB securities are exempt in 30 states. 

In both March and September 2018, OTC Markets Group participated in SEC panel discussions focused on combatting retail investor fraud and submitted a number of investor protection regulatory recommendations, which included:

  • Increasing the disclosure requirements around paid stock promotion to include the identity of the promoter, nature of the promotion and the amount paid.
  • Increasing the disclosure requirements for powerful market participants such as insiders, affiliates and institutions trading OTC securities.  For example, Insiders and affiliates should be required to disclose transaction information for non-SEC reporting companies and  institutional investment managers should be required to disclose holdings of all publicly-traded equities, including significant short positions.        
  • Limiting anonymous Objecting Beneficial Owner (OBO) accounts for company affiliates to give both investors and the issuer greater insight into who holds a company’s shares. 
  • Adopting investor suitability standards based on expertise and risk tolerance, which would allow broker-dealers to limit access to certain securities to customers based on experience and data-driven risk profiles.

OTC Markets Group Named Ranks Among Crain’s Best Places to Work in New York City
In December, OTC Markets Group ranked #28 among the Midsize Companies comprising Crain’s annual list of the 100 Best Places to Work in New York City which recognizes companies with the highest levels of employee satisfaction and engagement. The recognition underscores the critical role our workforce plays in these accomplishments and in driving future opportunities

OTC Markets Group Inc. (OTCQX: OTCM) operates the OTCQX® Best Market, the OTCQB® Venture Market and the Pink® Open Market for 10,000 U.S. and global securities.  Through OTC Link® ATS and OTC Link ECN, we connect a diverse network of broker-dealers that provide liquidity and execution services.  We enable investors to easily trade through the broker of their choice and empower companies to improve the quality of information available for investors.

To learn more about how we create better informed and more efficient markets, visit www.otcmarkets.com.

OTC Link ATS and OTC Link ECN are SEC regulated ATSs, operated by OTC Link LLC, member FINRA/SIPC.

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Media Contact:
OTC Markets Group Inc., +1 (212) 896-4428, media@otcmarkets.com

 

OTC Markets Group logo. (PRNewsFoto/OTC Markets Group)

 

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SOURCE OTC Markets Group Inc.

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