• fully reporting with the Securities and Exchange Commission,
• not a black check or inactive company,
• minimum of 40 stockholders of record holding at least 100 shares each (note: this number is informal and has been moving up),
• directors, officers, and stockholders will be scrutinized for previous involvements in other OTCBB companies, in particular blank check companies,
• must have a market maker submit 15c211 application to NASD and agree to act as market maker for securities of company.

OTCBB

The OTC Bulletin Board (OTCBB) is a listing of securities similar to the Pink Sheets, but operated independently. Many OTCBB companies are also listed on the Pink Sheets.

Grey Market

Securities that are not listed on any stock exchange, the OTCBB, or the Pink Sheets are considered to be in the Grey Market. Transactions are processed independently and not centrally listed or quoted. Trades are reported to a Self Regulatory Organization (SRO) who then passes the data on to market data companies.

OTCQX is a premium market tier offered by Pink OTC Markets that aims to raise the visibility of OTC-traded companies that, although not traded on a stock exchange, have operating businesses and provide substantial disclosure to the marketplace. The Pink Sheets has provided online stock tracking for many companies in its long history of online stock trading. . Similar to companies quoted on the Pink Sheets, OTCQX companies are not required to be fully SEC reporting companies (i.e. current with all SEC filings). Despite this, OTCQX companies must provide audited financials and certain disclosures to Pink OTC Markets.

OTCQX has two subcategories, PremierQX, the highest tier, and PrimeQX for companies that are too small for PremierQX, but otherwise meet the reporting requirements. The two categories are further differentiated into International and Domestic (US) companies.

Pink Quote, informally known as the Pink Sheets, is an electronic quotation system operated by Pink OTC Markets that displays quotes from broker-dealers for many over-the-counter securities. Market makers and other brokers can use Pink Quote to publish their bid and ask quotation prices. Starting in 1913, and prior to the creation of the electronic system in 2000, these quotes were printed on pink colored paper by the National Quotation Bureau. The term Pink Sheets is also used to refer to a market tier within the current Pink Quote system.

The Pink Sheets is not a stock exchange. To be quoted in the Pink Sheets, companies do not need to fulfill any requirements (e.g. filing financial statements with the SEC). With the exception of foreign issuers, mostly represented by ADRs, the companies quoted in the Pink Sheets tend to be closely held, extremely small, or thinly traded. Most do not meet the minimum U.S. listing requirements for trading on a stock exchange such as the New York Stock Exchange. Many of these companies do not file periodic reports or audited financial statements with the SEC, making it very difficult for investors to find reliable, unbiased information about those companies.

For these reasons the SEC views companies listed on Pink Sheets as "among the most risky investments" and advises potential investors to heavily research the companies in which they plan to invest.

Buying Pink Sheets shares is supposed to be difficult. Broker-dealers are enjoined to weed-out unsophisticated investors who may get an e-mail or word-of-mouth tip about a small stock. Many Pink Sheets stocks may only be registered for sale in one state so that the only way to purchase the stock is to make a DRIP/business/unsolicited/accredited or other sophisticated form of investment. Many registered representatives do not even know how or if they can sell them.