The application of large data in the American OTC market

The growing demand for compliance and regulation has led investors to pay more attention than ever to the convenience and real-time availability of complex and accurate information about markets and companies.

This spring, the US OTC group released the OTC compliance Data http://www.aliyun.com/zixun/aggregation/17568.html "> Management program, which covers its OTCQX, OTCQB, OTC Pink shares and company data in three major OTC trading areas, and is published 2 times a day. This can help intermediary companies, compliance teams, and risk management teams to better inquire about their key data indicators, including the low price share tax exemption status, investor suitability requirements, operating status, etc., so that they can automatically analyze and monitor the subject of their transactions.

The accompanying documentation also includes real-time market data and closing market data, providing price information on the subject matter of the OTCQX, OTCQB and OTC Pink, while the company and stock information provides valuable information about the company's executives, directors, and service providers. And all the data files in accordance with OTCQX, OTCQB and OTC pink for different companies, the current market in many over-the-counter intermediaries are using this classification method to achieve risk control and compliance management.

It is true that, as an operating agency in the OTC market, it is impossible for us OTC groups to have all the exact data available. Therefore, the agency requires all kinds of companies to share information with investors and intermediaries as widely as possible, so that the price will be more efficient. At the current level of technology, a common investor's share with a company may exist in only one relationship, either through financial terminals or through intermediaries ' trading systems, wrong or outdated information that makes investors vulnerable to misleading.

The data errors, outdated information or missing data in the investor's computer screen will not only affect the investors themselves, but also affect the intermediaries ' trading procedures, which will eventually affect the liquidity of the OTC market.

In addition, there are regulatory requirements that affect OTC intermediaries, since some of the U.S. financial-related legislation has asked intermediaries to make mandatory disclosures on specific issues, including:

1. Low-price Stock rules (Securities Act 1934 15g-2 to 15g-9)

The Securities and Exchange Commission (SEC) rules for lower-priced stocks (Penny-stock) are below $5 per share, with limited assets or almost negligible returns. Since low price stocks are often considered speculative, it is necessary for intermediaries to provide the necessary information and due diligence when educating investors.

Therefore, the data provided to investors should say that it is best to clarify whether a subject is exempt from the "low price stock rule". In general, eligibility for exemption includes: The latest purchase price is higher than $5, tangible net worth in the past year is more than 2 million dollars, or in the past 2 years more than 5 million U.S. dollars, in the past three years, the average annual income of at least 6 million dollars.

Here, the subject matter of OTC transactions in OTCQX must meet the exemption requirements, which is one of the minimum requirements for them to be listed.

2.FINRA 2,114 Section

The US Financial Supervision Authority (FINRA) is an unofficial regulatory body founded by the US Congress, which oversees the financial sector and financial intermediaries. 2,114 of these paragraphs are "regulatory requirements for investment advice to investors in the OTC market", requiring intermediaries to review the latest version of the Financial Act and to inquire about the financial information of all OTCQX, OTCQB, and OTC Pink, pending the issuance of the findings to investors.

This clause, like the "low price stock rule", also provides exemption clauses, subject to the topic of exemption: the issuer has at least 50 million USD in total assets and an owner's equity of USD 10 million in the latest financial audit year, or the issuer is a bank or insurance company, Or there is a purchase price of more than 50 dollars on the OTC transaction record.

The intermediary shall promptly and accurately indicate to the investor whether a particular subject complies with the above three exemptions and, if it complies with any or more of them, provide verifiable data.

3. The principle of self-caution of buyers

The US OTC group has put part of the label on a "skull" sign to remind investors that OTC trading groups believe the subject is at greater risk. This logo appears very vividly in the trading interface provided by the US OTC group, while also requiring reservations on the market interface provided by the traders, and requires that all external disclosure documents be marked.

This approach is recognized by most investors, intermediaries, clearing houses and other market subjects in the market. In fact, many intermediaries have directly refused to provide the trade access services with the marked subject matter, let alone offer trading advice to investors.

Advances in technology have greatly improved the convenience of investors, making it possible for investors to focus most of their energy on the attributes of the target itself, rather than on the operational level; After entering the big data age, all companies must do enough at the investor relationship level to ensure that they meet regulatory requirements such as SEC regulations, FINRA Principles and Blue Skies Act, which in turn encourage intermediaries to continue trading with investors in the company's shares and ensure liquidity. If a company wants to optimize its own stock price changes, it must clearly disclose its compliance information to ensure that all market subjects have consistent, real-time and accurate data to the company so that they can give institutional investors and individual investors an analysis of the underlying price changes.