The OTC Markets Group operates some of the most well-known networks, such as the Best Market (OTCQX), the Venture Market (OTCQB), and the Pink Open Market. Although OTC networks are not formal exchanges such as the NYSE, they still have eligibility requirements determined by the SEC.
The OTCQX does not list the stocks that sell for less than five dollars, known as penny stocks, shell companies, or companies going through bankruptcy. The OTCQX requires the highest reporting standards and strictest oversight by the SEC. It includes foreign companies that list on foreign exchanges and some U.S. companies that plan to list on the NYSE or the Nasdaq in the future.
The OTCQB is often called the "venture market" with a concentration of developing companies that have to report their financials to the SEC and submit to some oversight.
OTC Pink Sheets is the riskiest level of OTC trading with no requirements to report financials or register with the Securities and Exchange Commission. Some legitimate companies exist on the Pink Sheets, however, there are many shell companies and companies with no actual business operations listed here.
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