The Pink Sheets is an electronic quotation system that displays quotes from broker-dealers for many over-the-counter (OTC-traded) securities. A broker-dealer is a company that trades securities for customers as well as for its own account Over-the-counter ( OTC) trading is to Trade Financial instruments such as Stocks bonds, commodities or derivatives Market makers and other brokers who buy and sell OTC securities, can use the Pink Sheets to publish their bid and ask quotation prices. A market maker is a firm that quotes both a buy and a sell price in a Financial instrument or Commodity, hoping to make a profit on the turn The name "Pink Sheets" comes from the color of paper the quotes were printed on prior to the electronic system, then published by the National Daily Quotation Service. They are published today by Pink Sheets LLC, a privately owned company.
Pink Sheets LLC is neither a NASD broker-dealer nor registered with the U.S. Securities and Exchange Commission; it is not a stock exchange. Congress enacted the Securities Act of 1933 (the "1933 Act" the "Truth in Securities Act" or the "Federal Securities Act", enacted 1933-05-27 The US Securities and Exchange Commission (commonly known as the SEC) is an independent agency of the United States government which holds primary responsibility A stock exchange, share market or bourse is a Corporation or Mutual organization which provides "trading" facilities for Stock To be quoted in the Pink Sheets companies do not need to fulfill any requirements (e. Generally a company is a form of Business organization. The precise definition varies g. filing financial statements with the SEC). An SEC filing is a Financial statement or other formal document submitted to the U Financial statements (or financial reports) are formal records of a business' financial With the exception of a few foreign issuers (mostly represented by American Depositary Receipts, or ADRs), the companies quoted in the Pink Sheets tend to be closely held, extremely small, or thinly traded. Issuer - A legal entity that develops registers and sells securities for the purpose of financing its operations An American Depositary Receipt (or ADR represents the ownership in the shares of a foreign company trading on US financial markets In Finance, a trader is someone who buys and sells Financial instruments such as stocks, bonds and derivatives. Most do not meet the minimum U.S. listing requirements for trading on a stock exchange such as the New York Stock Exchange. A stock exchange, share market or bourse is a Corporation or Mutual organization which provides "trading" facilities for Stock The New York Stock Exchange ( NYSE) is a Stock exchange based in New York City. Many of these companies do not file periodic reports or audited financial statements with the SEC, making it very difficult for investors to find reliable, unbiased information about those companies. The most general definition of an audit is an evaluation of a person organization system process project or product Financial statements (or financial reports) are formal records of a business' financial Investment or investing is a term with several closely-related meanings in Business management, Finance and Economics, related to saving
For these reasons the SEC views companies listed on Pink Sheets as "among the most risky investments" and advises potential investors to heavily research the companies in which they plan to invest. Speculation, in a financial context is making an investment that increases the overall risk in a portfolio Financial Advice is Advice given in relation to financial matters such as Investing, Insurance, Borrowing, Saving and Retirement Research is defined as Human activity based on Intellectual application in the investigation of Matter.
Buying Pink Sheets shares is supposed to be difficult. In financial markets, a share is a Unit of account for various financial instruments including Stocks Mutual funds Limited partnerships Broker-dealers are enjoined to weed-out unsophisticated investors who may get an e-mail or word-of-mouth tip about a small stock. An injunction is an Equitable remedy in the form of a Court order, whereby a party is required to do or interact with in certain ways all right or to refrain from Electronic mail, often abbreviated to e-mail, email, or originally eMail, is a Store-and-forward method of writing sending receiving Word of mouth, is a reference to the passing of Information by verbal means especially recommendations but also general information in an informal person-to-person Insider trading is the trading of a Corporation 's Stock or other securities (e Many Pink Sheets stocks may only be registered for sale in one state so that the only way to purchase the stock is to make a DRIP/business/unsolicited/accredited or other sophisticated form of investment. A US state is any one of the fifty subnational entities of the United States of America that share Sovereignty with the federal government A dividend reinvestment program or dividend reinvestment plan (DRIP is an equity investment option offered directly from the underlying company A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to Accredited investor is a term defined by various securities laws that delineates investors permitted to invest in certain types of higher risk Investments Limited partnerships Many registered representatives do not even know how or if they can sell them. A Registered Representative, also called a General Securities Representative a Stock Broker, or an Account Executive is an individual who is licensed to sell Securities
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Premium Market Tier
OTCQX is a premium market tier offered by Pink Sheets LLC that aims to raise the visibility of OTC-traded companies that, although not traded on a stock exchange, have operating businesses and provide substantial disclosure to the marketplace via Pink Sheets, LLC. Over-the-counter ( OTC) trading is to Trade Financial instruments such as Stocks bonds, commodities or derivatives A stock exchange, share market or bourse is a Corporation or Mutual organization which provides "trading" facilities for Stock Pink Sheet has provided online stock tracking for many companies in its long history of online stock trading. Unlike most companies quoted on the Pink Sheets, OTCQX companies must provide audited financials and certain disclosures to Pink Sheets LLC but are not required to be fully SEC reporting companies (i. e. current with all SEC filings).
Disclosure Categories
Effective August 1, 2007, all Pink Sheets traded companies that are not able or willing to meet the standards of OTCQX will be placed in one of the following disclosure categories. Events 30 BC - Octavian (later known as Augustus enters Alexandria, Egypt, bringing it under the control of the Roman Designed to increase the amount of information available in all Pink Sheets traded companies, the disclosure categories do not signify issuer quality or merit of any security. Categorization is based on the level and timeliness of a company's disclosure and any category can include speculative, distressed, or questionable companies. Investors are encouraged to use caution when considering these companies for investment. [1]
- Current Information - Indicates reporting companies that submit filings to regulators with powers of review and that make the filings publicly available or non-reporting companies that make current information publicly available on the Pink Sheets News Service. The Current Information category is based on the level of disclosure and is not a designation of quality or investment risk. This category includes shell companies or development stage companies with little or no operations as well as companies without audited financial statements and as such should be considered extremely speculative by investors. A shell Corporation is defined in Barron's Finance & Investment Handbook as "a company that is incorporated but has no significant assets or operations The most general definition of an audit is an evaluation of a person organization system process project or product Financial statements (or financial reports) are formal records of a business' financial Speculation, in a financial context is making an investment that increases the overall risk in a portfolio
- Limited Information - Is designed for companies with financial reporting problems, economic distress, or in bankruptcy to make the limited information they have publicly available. Financial statements (or financial reports) are formal records of a business' financial Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their Creditors Creditors may file a bankruptcy petition against The Limited Information category also includes companies that may not be troubled, but are unwilling to meet Pink Sheets' Guidelines for Providing Adequate Current Information. Companies in this category have limited financial information not older than six months available on the Pink Sheets News Service or have made a filing on the SEC's EDGAR system in the previous six months. EDGAR, the Electronic Data-Gathering Analysis and Retrieval system performs automated collection validation indexing acceptance and forwarding of submissions by companies
- No Information - Indicates companies that are not able or willing to provide disclosure to the public markets - either to a regulator, a stock exchange or Pink Sheets. A stock exchange, share market or bourse is a Corporation or Mutual organization which provides "trading" facilities for Stock Companies in this category do not make Current Information available via Pink Sheets News Service, or if they do, the available information is older than six months. This category includes defunct companies that have ceased operations as well as 'dark' companies with questionable management and market disclosure practices. Publicly traded companies that are not willing to provide information to investors should be treated with suspicion and their securities should be considered highly risky. A security is a Fungible, Negotiable instrument representing financial value
- Caveat Emptor - Buyer Beware. There is a public interest concern associated with the company, which may include a spam campaign, stock promotion or known investigation of fraudulent activity committed by the company or insiders. Spamming is the abuse of electronic messaging systems to indiscriminately send unsolicited bulk messages In the broadest sense a fraud is a Deception made for personal gain or to damage another individual An insider is a member of any group of people of limited number and generally restricted access During a spam campaign, any stock that is not in the Current Information category will also have its quotes blocked on pinksheets. com.
References
External links
- Official website
- SEC information about the Pink Sheets
- SEC Listing and Delisting Requirements
- OTCQX website
- List of companies quoted on the OTCQX
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