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The Web Team

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Pinksheets Investors Questions Answered
« on: February 24, 2007, 09:24:33 PM »
What types of companies are quoted on the Pink Sheets?
There are a wide variety of companies quoted on the Pink Sheets. There are small companies that cannot or do not wish to meet the listing requirements of the exchanges; there are many large foreign issuers which are exchange listed in their home country but traded OTC in the US market (often because their financial statements are not prepared according to GAAP, which is a requirement for US listing); many Pink Sheet companies were formerly listed on an exchange and fell below the required standards for listing; due to the increased compliance costs associated with the Sarbanes/Oxley legislation, some listed companies have voluntarily delisted from exchanges and chosen to be traded over-the-counter; and there are a number of banks and other issuers that are thinly traded and so choose not to go to the expense of listing on an exchange.

Why isn't my security trading today?
There are many thinly traded stocks on the Pink Sheets that are not traded every day.

How do I trade Pink Sheets stocks?
You must open an account with a broker to trade Pink Sheet stocks. The Pink Sheets itself is not a broker and does not provide a trading service to investors. For more information on trading Pink Sheet stocks, see: How to Buy or Sell Pink Sheet Stocks.

Why don't I see my order in the quotes?
Pink Sheet securities are not subject to Limit Order Display requirements. A market maker is not required to reflect a customer's order in its published quotation.

Why hasn't my order been executed?
You need to ask your broker this question. Brokers hold customer orders in their proprietary order books and only they can tell you specifically why it has not yet been filled. Possible explanations include: the order may not yet be marketable or if it is/was marketable, other customer orders at the same price may have been in the order book longer than yours and gotten executed first.

What does "Q" mean after a stock symbol?
In the fifth character of a symbol, "Q" means the issuer of the security is involved in bankruptcy proceedings.

How can I get the short interest for a Pink Sheet stock?
NASD rules do not require that market participants report their short interest in non-Nasdaq OTC securities. This is required only for Nasdaq (and exchange) listed securities, thus short interest information is not available for Pink Sheet securities.

How can I get a list of stocks by industry, company type or price range?
This information is not currently available. We are planning a future enhancement to www.pinksheets.com that will permit users to search for securities based on these types of criteria. The statistics that we do currently track are available in the Trading Statistics section of our website.

What happened to my shares when the company was delisted?
If your stock was delisted from another market and is now quoted on the Pink Sheets, nothing has changed with the shares themselves. You are still the registered owner of the securities and can trade them. You should check with your current broker to make certain that they will trade Pink Sheet stocks, if not, you will need to locate a broker that does. There is a list of these brokers at the bottom of the page in How to Buy and Sell Pink Sheet Stocks.

Why can't I get volume during the day for some securities?
All trades in OTC securities are required to be reported to the NASD via the Nasdaq ACT System within 90 seconds of the transaction. However, Nasdaq only disseminates this information in real-time for domestic OTC equities and for ADR and foreign OTC equities that are quoted on the OTCBB. For ADR and Foreign equities that are quoted on the Pink Sheets or traded in the grey market, High, Low, Close and Volume are disseminated to the market place only after the close of the market for the day. Individual trades are never disseminated for these securities. There is no regulatory requirement to withhold this information from the market place; it is simply a practice of the NASD and The Nasdaq Stock Market. Pink Sheets disagrees with this practice and has requested that Nasdaq disseminate trade data for foreign equities in real time, which would allow investors the ability to better monitor the quality of their executions in these securities.

Why is the company contact information for a company on pinksheets.com missing or inaccurate?
Pink Sheets issuers are not required to maintain current address or contact information with the Pink Sheets. Pink Sheets does not have a listing agreement with its issuers and no other mean of compelling companies to provide this information to us, although many do so voluntarily. Pink Sheets has a relationship is with the broker/dealers that quote the stocks, not with the issuers of the stocks themselves.

How can I get a list of new companies and IPOs?
The Pink Sheets is only for seasoned securities; there are no IPOs in this market. You can get a list of securities that are new to the Pink Sheets for the previous 7 days at the Market Data section of our website.

What happens when trading in a Pink Sheet security is suspended by the SEC?
SEC suspensions last 10 days for OTC securities. When a security is suspended, Pink Sheets removes all market makers and their quotes from the system and displays a "Halted/Suspended" message. After 10 days, market makers may re-enter the stock if they comply with Rule 15c2-11, which requires filing a new From 211, which must include the issuers' current financial information.

The Web Team


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