OTC Markets Group Reports 2012 Trading Statistics and Highlights

NEW YORK, March 6, 2013 /PRNewswire/ -- OTC Markets Group (OTCQX: OTCM), operator of Open, Transparent and Connected financial marketplaces, today announced its trading statistics and news highlights for 2012. 

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2012 highlights include:

  • The OTCQX® marketplace grew 27% in 2012 as an additional 86 companies qualified for trading, bringing the total number of OTCQX securities to 400, as of December 31, 2012.  Trading in OTCQX securities accounted for 16.9% of the total dollar volume of trading in all OTCQX, OTCQB® and OTC Pink® securities in 2012, a 60% increase from 2011.
  • The number of American Depositary Receipts (ADRs) and foreign ordinary shares traded on the OTCQX, OTCQB and OTC Pink marketplaces increased 412 to a total of 3,083, as of December 31, 2012, and accounted for 77% of the total dollar volume of trading in OTCQX, OTCQB and OTC Pink securities last year.
  • The total dollar volume of OTCQX, OTCQB and OTC Pink securities declined 41% to $135.6 billion amid lower trading volumes across all U.S. equity markets in 2012. 
  • OTC Link® LLC, OTC Markets Group's wholly-owned subsidiary, gained Financial Industry Regulatory Authority™ (FINRA™) membership and registered with the U.S. Securities and Exchange Commission (SEC) as an Alternative Trading System (ATS).
  • OTC Markets Group made significant enhancements to its OTC Disclosure & News Service, making it easier for non-SEC reporting U.S. and global companies to distribute news and financial disclosure through professional databases and financial portals.
  • OTC Markets Group's Market Data Licensing business line expanded its distribution network by partnering with Six Financial, FactSet and Nasdaq UltraFeed to bring OTC Markets Group's market data to a wider group of investors.
  • OTC Markets Group partnered with BNY Mellon to launch the OTCM ADR Index, the first-ever index of OTC ADRs designed to benchmark the high-quality ADRs trading on the OTCQX, OTCQB and OTC Pink marketplaces.

"While 2012 was a challenging year for the equity markets, we continued to make progress in growing the OTCQX marketplace, adding 86 companies and 16 DAD/PAL advisors during the year," said R. Cromwell Coulson, President and CEO of OTC Markets Group.  "More companies are seeing the value of OTCQX for providing their investors with a high quality experience when they analyze, value and trade their securities.

"In 2013, we plan to continue growing our OTCQX marketplace and expanding our data network with new redistributors," said Coulson.  "In addition, as the JOBS Act rules are implemented, we anticipate more companies will raise equity capital that can be traded on our marketplaces, creating visibility for companies and liquidity for their investors."

OTCQX Marketplace Sees Continued Growth in 2012; More Companies Using OTC Disclosure & News Service to Make Disclosure Available to Investors

OTC Markets Group continued to grow its OTCQX marketplace with the addition of 86 companies in 2012, for a total of 400 companies as of December 31, 2012.  New additions to OTCQX in 2012 included: Balfour Beatty plc, Bombardier Inc., Hypermarcas SA, Severn Trent plc and Volkswagen AG.  In addition, OTCQX added 16 Designated Advisors for Disclosure ("DADs") and Principal American Liaisons ("PALs") in 2012, bringing the total number of DAD and PAL advisors for OTCQX companies to 53.

Trading in OTCQX securities accounted for nearly 17% of the total dollar volume of trading in 2012, a year-over-year increase of 60%.  The total aggregate market capitalization of securities traded on OTCQX reached a record $1.2 trillion in 2012.

OTC Marketplace

# of securities

2012 $ Volume

% of Total $
Volume

Total Market Capitalization (in millions)*

OTCQX®

400

$22,944,077,658

16.92%

$1,298,150

OTCQB®

3,401

$31,473,130,100

23.21%

$185,910

OTC Pink® Current Information

2,499

$74,373,618,933

54.84%

$10,160,632

OTC Pink® Limited Information

609

$3,802,790,602

2.80%

$8,500

OTC Pink® No Information

3,065

$3,028,535,649

2.23%

$26,498

Totals

9,974

$135,622,152,942

100.00%

$11,679,689

* Selected data as of December 31, 2012




The total dollar volume of OTCQX, OTCQB and OTC Pink securities declined 41% in 2012 to $135.6 billion.  The total number of securities traded on the marketplaces declined by 192 to a total of 9,974, as of December 31, 2012.  Almost 95% of the total dollar volume of trading in 2012 took place in companies that provide current information to investors.

In 2012, OTC Markets Group made significant improvements to its OTC Disclosure & News Service, which was used by more than 1,000 companies to publish news and financial reports last year.  In June, OTC Markets Group launched the OTC Financials Data service, a partnership with Edgar Online that distributes financial data, including data in XBRL format, for companies that use the OTC Disclosure & News Service as their primary U.S. disclosure venue.  The service provides added visibility and transparency for investor-focused, non-SEC registered U.S. and global companies by making it easy for investors to extract, assess and analyze their company financial data through professional databases and financial portals such as Yahoo! Finance.

In the fourth quarter of 2012, the company announced a partnership with PR Newswire that integrates PR Newswire's news distribution service with OTC Markets Group's OTCIQ.com IR and business intelligence portal for OTCQX, OTCQB and OTC Pink companies.  As a result, OTCIQ.com subscribers now have the option of using OTCIQ.com or PR Newswire to distribute news and information and meet disclosure requirements while ensuring the maximum distribution of news. 

Also in the fourth quarter 2012, OTC Markets Group introduced new disclosure guidelines for OTC Pink companies to align them more closely with the SEC's Rule 15c2-11, which outlines the information a broker-dealer must have in its possession to initiate quotations in a security.  This included eliminating the requirement for companies with audited financials to provide an attorney letter to qualify for the OTC Pink Current Information tier and reducing the continuing requirement for attorney letters from four times per year to annually.  These changes were enacted to encourage more OTC Pink companies to make information about their business, securities, and control persons available to investors and broker-dealers through the OTC Disclosure & News Service. 

Expansion of Market Data Distribution Network; Launch of OTCM ADR Index

OTC Markets Group's Market Data Licensing division continued to expand its data distribution network in 2012, announcing partnerships with 10 data providers, including Six Financial, FactSet and Nasdaq UltraFeed.  The company also moved its Market Data Licensing customers off the legacy QDIST unicast market data feed and onto a new multicast binary data feed.  The multicast architecture allows customers to consume only the data they require and the binary format requires considerably less bandwidth than the legacy ASCII-formatted feed.

In December, OTC Markets Group partnered with BNY Mellon, the global financial services firm, to launch the OTCM ADR Index, the first-ever index of ADRs traded on the OTCQX, OTCQB and OTC Pink marketplaces.  The index, comprised of more than 500 large-cap international companies from 38 countries, provides a benchmark that is designed to showcase the fast-growing and diverse ADR investment opportunities available in the OTCQX, OTCQB and OTC Pink marketplaces.  

More than 3,000 ADRs and foreign ordinaries trade on the OTCQX, OTCQB and OTC Pink marketplaces, a nearly 400% increase since 2003, reflecting investors' growing interest in international investment opportunities.  ADRs and foreign ordinaries represent the largest asset class of OTCQX, OTCQB and OTC Pink securities, making up 77% of the total dollar volume traded last year.

OTC Link ATS Becomes an SEC-Registered ATS

In March 2012, OTC Link LLC, OTC Markets Group's wholly-owned subsidiary, became a broker-dealer member of FINRA and an SEC-registered ATS.  As a result, OTC Link ATS now operates the OTC Link trading system that directly links a diverse network of broker-dealers which provide liquidity and execution services for a wide spectrum of securities.

Passage of the JOBS Act Heralds Expanded Capital Opportunities for Small Companies

On April 5, 2012, the Jumpstart Our Business Startups Act ("JOBS Act") was signed into law, making it easier for American small businesses to raise capital by reducing various securities regulations governing public and private offerings.  Among its provisions, the JOBS Act:

  • Eliminates the prohibition on general solicitation and advertising related to certain private offerings
  • Raises the Regulation A offering threshold from $5 million to $50 million
  • Increases the number of shareholders a company may have before requiring mandatory SEC registration from 500 holders of record to 2,000 holders of record
  • Creates a "crowdfunding" exemption, allowing companies to raise up to $1 million over 12 months from an unlimited number of investors
  • Reduces the cost and regulatory burden of going public for "Emerging Growth Companies," defined as companies with less than $1 billion in annual revenue
  • Increases flexibility for broker-dealers to issue research reports on Emerging Growth Companies.

The SEC is now writing rules to implement the new law.  While the initial December 2012 deadline has passed, OTC Markets Group anticipates several JOBS Act provisions, in particular the changes to Regulation A and elimination of the ban on general solicitation in private offerings, will increase the number of companies and shares that can be traded on our marketplaces.  As the leading trading system for unlisted equity securities, OTC Link ATS will facilitate efficient trading through any broker and provide a transparent secondary market for these shares.

About OTC Markets Group Inc.

OTC Markets Group Inc. (OTCQX: OTCM) operates Open, Transparent and Connected financial marketplaces for 10,000 U.S. and global securities. Through our OTC Link® ATS, we directly link a diverse network of broker-dealers that provide liquidity and execution services for a wide spectrum of securities. We organize these securities into marketplaces to better inform investors of opportunities and risks – OTCQX®, The Best Marketplace with Qualified Companies; OTCQB®, The Venture Stage Marketplace with U.S. Reporting Companies; and OTC Pink® The Open Marketplace with Variable Reporting Companies. Our data-driven platform enables investors to easily trade through the broker of their choice at the best possible price and empowers a broad range of companies to improve the quality and availability of information for their investors. To learn more about how we create better informed and more efficient financial marketplaces, visit www.otcmarkets.com.  

OTC Link ATS is operated by OTC Link LLC, member FINRA/SIPC and SEC registered ATS.

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SOURCE OTC Markets Group Inc.



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