A “stock exchange” is an exchange which provides services for stock brokers and traders in trading stocks, bonds and other securities. The various stock exchange provide facilities for the issue and redemption of securities and other services.
There are a number of major “Stock Exchanges” in the United States that are used by brokers for the handling of stock. Exchanges are located all around the world. Almost every major country has their own exchanges.
Many of the exchanges have certain requirements for a stock to trade through that exchange. Some exchanges are far more rigid than others. Requirements may include the number of shareholders, price of the stock, sales and/or earnings, audited financial statements, be fully reporting to the SEC, and others.
Some exchanges used by brokers in the U.S. include:
NASDAQ Stock Market - The NASDAQ Stock Market stands for National Association of Securities Dealers Automated Quotations, is an American stock exchange and is the second-largest stock exchange by market capitalization in the world. As of January, 2011, NASDAQ had approximately 2,711 listings with a total capitalization of over $4.5 trillion. The NASDAQ has more trading volume than any other electronic stock exchange in the world. NASDAQ is owned by NASDAQ QMX Group which owns the OMX stock exchange network. It is often the goal of young public companies to be listed on a stock exchange, usually NASDAQ. Listing on NASDAQ allows for more trading of a company's stock. A company has to meet certain requirements for listing on the NASDAQ reporting system.
The present requirements are as follows:
Total Assets: $4 million
Total Stockholders Equity: $2 million
Registration under Section 12 (g) of the Securities Exchange Act of 1934 or equivalent
Public Float (shares): 100,000
Market Value of Public Float: $1 million
Minimum Bid Price of Stock: $3
Number of Marketmakers: 2
NASDAQ – Home page National Stock Exchange (NSX) - The National Stock Exchange (NSX) is an electronic stock exchange located in Chicago Illinois and was founded in 1885 in Cincinnati, Ohio, as the Cincinnati Stock Exchange. In 1976, it closed it physical trading floor and became an all-electronic stock market and in 1995 moved its headquarters to Chicago and in 2003, changed its name to the National Stock Exchange. Owned by its members since inception it demutualized in 2006.
National Stock Exchange - NSX Home page New York Stock Exchange (NYSE) - The New York Stock Exchange (NYSE) is a stock exchange located in lower Manhattan, in New York. It is by far the world’s largest stock exchange listing about $13.39 trillion in market capitalization as of Dec. 2010. Average trading value in 2008 was approximately $153 Billion.
The NYSE is operated by NYSE Euronext (NYSE:NYX) which was formed by the NYSE’s 2007 merger with the fully electronic stock exchange Euronext. The NYSE trading floor is located at 11 Wall Street in lower Manhattan, and is composed of four rooms used for the facilitation of trading.
FINRA OTCBB OTC Markets Group (OTCQX, OTCQB, PINK SHEETS) - The OTC Markets Group, Inc. is a private company that provides services to the U. S. over the counter securities market including electronic quotations, trading, and messaging and information platforms. It is not a stock exchange but facilitates the exchange of securities between qualified independent brokers.
The Company was established in 1913 and The National Quotation Bureau (NQB) and for decades, they reported quotations for both stocks and bonds by publishing the quotations in the paper based Pink sheets and Yellow Sheets. The publications got their names from the color of paper they were printed on. The Pink Sheets were published week on pink colored paper.
OTCQX - (Owned by OTC Markets) The OTCQX was established in 2007 and is the top tier of the OTC Markets group and is only for companies that meet certain higher standards, such as being fully reporting to the SEC, number of shareholders, price of stock, etc.
OTCQB - (Owned by OTC Markets) The OTCQB is the middle tier of the OTC Markets group. To be listed on the OTCQB, a company has to fully reporting to the SEC. Thus, all information on the company is reported every quarter to the SEC and is posted on EDGAR. There are no financial or qualitative standards to be on this tier, only fully reporting.
OTCQB- What Investors should know – OTC Markets Pink Sheets – (Owned by OTC Markets) The OTC Pink Sheets derives its name from years past when the company would mail the quotes on stocks that were quoted on pink colored sheets of paper and sent out weekly to subscribers. At the introduction of the internet, the quotation of companies went electronic.
OTC Pink is a trading marketplace for stocks that may not be quoted on other major exchanges such as the New York Stock Exchange or Nasdaq. There are over 2 thousand companies listed on the OTC Pinks. Now, anyone can see what the quote of any company listed on any of the quoting services by putting in the symbol of the company on the OTC Pink website.
The major difference between the OTC Pink Sheets and other listing services is there are no financial requirements for a company to list on the OTC Pinks, while other listing services such as the OTCBB and OTCQB and OTVQX all require that the Company have audited financial statements and file periodical reports with the SEC to be posted on EDGAR. Stocks quoted on the OTC Pinks do not have to be “reporting” companies. There, these companies are not require to supply timely and current information to investors. Companies listed on the OTC Pinks are usually those that do not desire to be a “reporting” company, cannot afford the cost of filing annual and quarterly reports to the SEC and companies that may have been a “reporting” company and either quit reporting to the SEC or are late in their filings. Any company that is a reporting company and fails to keep their reporting current will be “de-listed” from another exchange or reporting service and dropped into the Pink Sheets. The OTC Pink actually has several levels or tiers which will show up on the web.
OTC Pink Current Information:
These are companies that have submitted information to OTC Pinks that is not older than six months. This includes financial information on the company. However, financial statements do not have to be audited. Companies may be “shell” companies or development stage companies.
OTC Pink Limited Information (Yield)
These are companies that are unwilling or unable to meet OTC Pinks’ Guidelines for Providing Adequate Current Information, but have submitted some but not all of the information required. Such companies may have problems getting the financial information, are in some economic distress or perhaps have filed bankruptcy.
OTC Pink No Information (Stop Sign)
This indicates companies that are unable or unwilling to provide any disclosure information to OTC Pinks or to the public. The companies do not make any current information available. The companies may include defunct companies that have ceased operations as well as companies that may have questionable management and market disclosure practices. The securities are considered very risky.
OTC Pink Caveat Emptor – Buyer Beware (Skull and Crossbones)
This means that OTC Pink has a real concern about the company or activities associated with the company. This could such things as a spam campaign or questionable stock promotion or a know investigation of fraudulent activity committed by the company their insiders. OTC Pink may refuse to give a quote on these stocks.