Here Are Some Essential Facts About Otcqx And Pink Sheets

I'm sure you have heard of Pink Sheets and the OTCQX at some point

. You may not know a lot about it, but here are some essential facts in regards to the title of this article.

What are Pink Sheets?

Originally the quotations were printed on a pink slip and hence where the term 'Pink Sheets' originated from. In reality, they are an electronic quotation system that is operated by the Pink OTC Markets. It displays many quotes from over-the-counter (OTC) securities through various brokers.

Some people refer to it as penny stocks since the value of the stock could be less than $3 in most cases. It will be handy to note that the Pink Sheets are not a stock exchange if you were wondering. Obviously there are some great benefits if you decide to list your company with Pink Sheets and they are as follows:

1) Pink sheets can be very volatile. It means that if you had a company with $300 million, you may double it over night and thus reap substantial profit. The market itself is very volatile and is considered riskier, but there is more scope for investors to get in for very low amounts and make a massive profit very quickly if the company offers good stock.

2) Investors can expect to buy shares that will be less than $1 most of the time. But anything from $1 to $5 is what you can expect to pay instead of $25 a share or higher in other stock markets. That's the reason they're called penny stocks as well.

You can get shares for really cheap if you're willing to invest in a somewhat riskier company. Having your company trade on the Pink Sheets means it will attract investors easier as well, as long as you make sure you have enough information available for the potential investor.

3) Another benefit is you don't need a stock broker to trade on the Pink Sheets. The cost associated with a stock broker is often a deciding factor for some individuals when purchasing stock and doing it through the Pink Sheets. You can actually do it yourself on the Internet and which means you're your own boss. You decide when and where.

4) Your company will not be regulated by the SEC (Securities and Exchange Commission), but by issuing stock you are bound by Federal and State Security Laws or International laws depending on where your company is situated.

If you wondered where the OTCQX comes in, well, it's more for investor-focused companies that would love to use the innovative OTCQX platform by offering investors a chance at transparent trading, ease of access through regulated brokers in the U.S. and quality information. Previously the services were only available on the U.S. Exchange, but it's now accessible everywhere.

For some companies it's the final step toward NYSE and NASDAQ listing by getting their company on the OTCQX. If you're considering getting your company listed on the OTCQX, you will be happy to know that investors prefer the quality controlled listings on the OTCQX and it will also prove to your shareholders that you are committed to providing superior information and maintaining high quality standards in your company.

By going on the OTCQX you do not have to report to the SEC but you need to provide audited financials and some disclosures to the Pink OTC Markets.

Find a good 'Going Public' firm to help you decide if the Pink Sheets is for your company. In the long run it will help your company with raising capital and with regulation d, 506 offerings and private placements.

by: Jason Bacot

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