OTC Markets Group Reports 2011 Trading Statistics & Highlights

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Feb 06, 2012, 05:00 ET

NEW YORK, Feb. 6, 2012 /PRNewswire/ -- OTC Markets Group (OTCQX: OTCM), the company that operates the world's largest electronic marketplace for OTC-traded equities, today announced 2011 trading statistics and marketplace trends. 2011 was a strong year for growth in the OTC marketplace, including increases in the number of securities traded and the number of data providers offering OTC data to investors.

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2011 highlights include:

The OTC Link^® interdealer quotation system provided widespread price transparency in over 10,000 securities, with 789 securities added in 2011.
The marketplace saw the value of securities traded by broker-dealers increase by 59% year-over-year, as dollar volume surpassed $229 Billion in 2011.
OTCQX^®, the intelligent marketplace for the best OTC companies, grew by 98%, from 159 companies on December 31, 2010 to 314 companies on December 31, 2011.
OTC Markets Group's Market Data Services expanded its distribution network by partnering with NYSE Technologies' SFTI^® Network and SuperFeed™ to bring OTC Markets Group's market data to a wider group of investors.
Quote Access Payment ("QAP"™) One Statement service was introduced to provide real-time transparency of trading costs for market participants, control of access fees and rebates by individual liquidity providers and provide factoring services to participating broker-dealer firms.

"OTC Markets Group's network expanded throughout 2011. In 2012, we will be looking to further build our community, scale our platform, and expand our data network with new redistributors," stated R. Cromwell Coulson, President and CEO. "We will also be looking to add a broader range of securities to our platform, as I think our network model of competing liquidity and execution providers is a superior platform for many different asset classes."

Broker-Dealers Increase Activity in International Securities; QAP, Market Order Manning and Limit Order Display Enter the OTC Marketplace

Throughout 2011, OTC Markets Group increased the number of securities quoted and traded on its OTC Link trading platform. Liquidity providers and cross border traders became increasingly active in foreign ordinary and ADR securities, executing over $189 Billion in transactions in these securities as compared to $102 Billion in 2010. In 2011, foreign ordinaries and ADRs made up over 80% of all dollar volume traded in OTC securities as compared to 71% in 2010. The rise in activity related to international securities shows a trend of more investors seeking international investment opportunities through their U.S. brokers.

2011 ushered in three major changes to trading regulation with the introduction of Limit Order Display ("LOD"), Market Order Manning, and Access Fees. Early in the year, OTC Markets Group provided the necessary system enhancements for subscribers to remain compliant with LOD. OTC Markets Group recently released dynamic access fee display and the QAP One Statement service to meet broker-dealer needs in response to the new Access Fee rules. The QAP One Statement service provides factoring services related to access fee amounts due to and from other market makers. Access fees became the marketplace norm after dynamic access fee display was launched on December 1, 2011, with over 81% of quotes on OTC Link displaying an access fee or rebate.

During 2012, OTC Markets Group's OTC Link subsidiary plans to become a broker-dealer member of the Financial Industry Regulatory Authority (FINRA^®) and subsequently register with the Securities and Exchange Commission (SEC) as an Alternative Trading System (ATS). OTC Link will operate an open network business model and comply with FINRA Rules offering an exemption from certain broker-dealer trade reporting requirements.

On December 31, 2011, 10,166 equity securities were available for quoting and messaging on OTC Link, along with a number of TRACE-eligible fixed income securities. Additionally, 96.5% of all priced quotes in OTC equity securities were published on OTC Link, with an average of 8.59 market makers per security on the OTC Link platform versus 1.67 on the FINRA OTCBulletin Board.

Trading Venue	Priced Quotes*	% of Priced Quotes	Avg. # Market Makers / Security
OTC Link	63,831	96.5%	8.59
OTC Bulletin Board	2,333	3.5%	1.67

*Data as of December 30, 2011.

Data for Over 10,000 OTC Securities Increasingly Accessible to Investors

OTC Markets Group's Market Data Services saw widespread growth throughout 2011, with increased subscriptions to real-time data on over 10,000 OTC securities. OTC Markets Group's Market Data Services expanded the OTC distribution network by partnering with NYSE Technologies' SFTI Network and SuperFeed, which offers subscribers access to detailed market data for all major trading venues and now includes data on OTC securities. In addition, Market Data Services anticipates that OTC Markets Group's data will soon be available on NASDAQ's UltraFeed(SM), which aggregates all North American equity, options, futures and index data feeds. These new partnerships continue OTC Markets Group's tradition of providing transparent and efficient access to market data.

Market Data Services also released a new multicast data feed and anticipates the decommissioning of the QDIST data feed. The new multicast feed provides subscribers with product and implementation flexibility and includes QAP information. As access fees become a standard in the OTC marketplace, access to QAP data will remain a priority for all data vendors.

In October, OTC Markets Group announced a partnership with Edgar Online to create an OTC Financials data product that will increase the availability and usability of financial data posted through the OTC Markets Group disclosure system. The partnership, set to launch in the first quarter of 2012, will offer easily consumable data files and APIs to data distributors, financial portals and investors for over 600 OTC companies, including all OTCQX companies. All data will also be available on www.otcmarkets.com.

OTC Markets Group Sees Growth in Companies Quoted; 98% Growth in OTCQX; Increased Display of Tiers Across Financial Portals

OTC Markets Group's Issuer Services saw impressive growth on all market tiers, with the number of securities quoted growing to 10,166, totaling over $229 Billion in annual volume.

OTC Market Trade Summary - 2011 Year-End Data

OTC Market Tier		# Securities*		2011 Dollar Volume	% of Total 2011 Dollar Volume	Market Capitalization (in Millions)*
OTCQX	314		$24,393,177,723		10.6%	$1,014,746
OTCQB^®	3,625		$48,106,558,664		21.0%	$152,413
OTC Pink^® Current Information	2,147		$147,347,481,013		64.2%	$10,205,923
OTC Pink Limited Information	741		$6,264,224,922		2.7%	$8,556
OTC Pink No Information	3,339		$3,271,150,777		1.4%	$72,366
Totals	10,166		$229,382,593,099			$11,454,008

*Data as of December 31, 2011.

The most notable growth occurred on the highest tier of the OTC marketplace, OTCQX. The number of securities quoted on OTCQX grew to 314 in 2011, an increase of 98%. OTCQX securities now span 28 countries around the globe, as 2011 saw the addition of global leaders such as Canadian Oil Sands, Cielo, Danone, Publicis, Repsol, and Yamaha, as well as over 100 TSX-listed Canadian companies and a number of entrepreneurial U.S. companies. OTCQX recorded a record high of $24 Billion in dollar volume traded in 2011, a year-over-year increase of more than 60%.

High profile financial websites and online brokers continued to adapt to the OTC Markets Group three-tiered categorization system for OTC securities. These financial portals, including CNBC.com, FT.com, and a number of major online brokers, now display tier information for all securities on the OTC Link platform. The OTC Markets Group tiers have become a valuable tool for investors and broker-dealers in performing due diligence on OTC-traded companies, and market participants will continue to encourage financial sites to properly display the tiers.

Congress Focuses on Small Company Capital Formation

In 2011, bipartisan legislation aimed at increasing small companies' access to capital gained traction in Congress. Bills overwhelmingly passed by the House and currently under consideration by the Senate include proposals to: (i) raise the shareholder thresholds that trigger mandatory SEC reporting to allow small companies to grow before subjecting them to burdensome reporting obligations; (ii) raise the offering exemption under SEC Regulation A from $5 to $50 million to allow companies to raise meaningful capital without being subject to ongoing SEC reporting obligations; and (iii) allow general solicitation and advertising to accredited investors in certain private placements. OTC Markets Group will continue to monitor this important legislation as it moves through Congress.

About OTC Markets Group Inc.

OTC Markets Group Inc. (OTCQX: OTCM) operates the world's largest OTC marketplace for equity securities. Our OTC Link trading system delivers price transparency in over 10,000 securities and enables direct interaction between broker-dealers that provide liquidity and execution services. We organize the marketplace by categorizing the wide spectrum of OTC-traded companies into three tiers: OTCQX - The Intelligent Marketplace for the Best OTC Companies; OTCQB - The Venture Marketplace; and OTC Pink - The Open Marketplace. Our information-driven platform makes it easy for investors to trade at the best price through the broker of their choice and empowers companies to build the best markets for their investors. To learn more about our Open, Transparent, and Connected marketplace, visit www.otcmarkets.com.

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SOURCE OTC Markets Group