Interdealer Quotation System

The interdealer (or inter-dealer) quotation system (IQS) is an exchange system comprised of the Nasdaq (National Association of Securities Dealers Automatic Quotation), Nasdaq small-cap market and the Over-the-Counter Bulletin Board (OTCBB) exchange platforms. The Interdealer Quotation System gives investors access to literally thousands of publicly traded companies, from mega-cap names such as Microsoft right down to the smallest of the micro cap stocks.

Interdealer quotation systems allow investors access, crucially, to smaller issues such as those which trade OTC, but in a standardized fashion consistent with FINRA regulations, and so mostly deal with OTC quotes.

The OTC Bulletin Board (OTCBB) is an electronic interdealer quotation system that displays quotes, last-sale prices, and volume information for many OTC equity securities that are not listed on a national securities exchange such as the NYSE. Securities quoted on the OTCBB include domestic, foreign and American depository receipts (ADRs). OTCBB may also be referred to as the "pink sheets."

Only broker-dealers qualified with FINRA as market makers can apply to quote securities on the OTCBB. Under the OTCBB's eligibility rule, companies that want to have their securities quoted on the OTCBB must seek the sponsorship of a market maker as well as file current financial reports with the SEC or with their banking or insurance regulator.

OTC Link is another electronic interdealer quotation system that displays quotes, last-sale prices, and volume information in exchange-listed securities, OTC equity securities, foreign equity securities and certain corporate debt securities. In addition to publishing quotes, OTC Link provides, among other things, subscribers the ability to send and receive trade messages, allowing them to communicate for the purpose of negotiating trades.

All subscribers to OTC Link are broker-dealers that are members of FINRA. Subscribers are permitted to quote any OTC equity security eligible for quoting under the Exchange Act Rule 15c2-11 or the applicable exemptions the rule. OTC Link does not require companies whose securities are quoted on its system to meet any eligibility requirements. With the exception of some foreign issuers, the companies quoted on OTC Link tend to be closely held, very small and thinly traded. Most issuers do not meet the minimum listing requirements for trading on a national stock exchange. Many of these companies furthermore do not file periodic reports or audited financial statements with the SEC, making it difficult for the public to find current, reliable information about those companies. OTC Link is registered with the SEC as a broker-dealer and as an alternative trading system (ATS), and is a member of FINRA.

Global OTC is an electronic interdealer quotation system that displays quotes, last-sale prices, and volume information in global OTC equity securities, and is operated by Archipelago Trading Services, Inc., a broker-dealer registered with the SEC.