OTC Markets Explained: OTCQX, OTCQB, OTCID and Pink Tiers

OTC stocks are shares that trade over the counter, meaning through broker-dealers and trading systems rather than on a national exchange such as Nasdaq or NYSE American. OTC Markets Group sorts the securities it quotes into tiers by how much current information the company provides: OTCQX, OTCQB, OTCID, Pink Limited and the Expert Market. For retail investors in micro-caps, the tier is the first fast signal of how much you can verify about a company, and SEC Rule 15c2-11 determines whether a quote is public at all.

What “over the counter” means

FINRA describes OTC trading as generally any trading that takes place off an exchange. Exchange-listed stocks can trade this way too, but unlisted equities trade only off-exchange. Trades in OTC equities must be reported to the FINRA OTC Reporting Facility for real-time public dissemination.

The SEC explains that many microcap stocks trade in the OTC market, with quotes available from a broker-dealer directly or on systems such as OTC Link ATS and Global OTC ATS. Both are run by FINRA-registered broker-dealers and file Form ATS notices with the SEC.

The key difference from an exchange, per the SEC, is that exchange-listed companies must meet minimum listing standards such as net assets and shareholder counts. OTC companies may only need to meet the criteria of the quotation tier, if any, plus the information rule below.

The tiers as of October 2026

OTC Markets restructured its lower tiers on July 1, 2025. The current tiers, from top to bottom, are OTCQX Best Market, OTCQB Venture Market, OTCID Basic Market, Pink Limited Market and the Expert Market (which OTC Markets also describes as the Expert Restricted Market, in the launch release). The comparison chart below is from OTC Markets Group’s own US-company chart, updated July 2026.

	OTCQX	OTCQB	OTCID
Positioning (OTC Markets)	Best market for established investor-focused companies	Venture market for entrepreneurial and development-stage companies	Basic market for companies that meet minimum information requirements
Bid price	$0.25 initial, $0.10 ongoing	$0.05 initial, $0.01 ongoing	Not required
Market capitalization	$25M initial, $10M ongoing	Not required	Not required
Public float	$5M market value plus additional criteria	10%	Not required
Penny stocks	Not eligible	Eligible	Eligible
Shell companies	Not eligible	Eligible	Eligible
Bankrupt companies	Not eligible	Not eligible	Permitted
Audited annual report	Required	Required	Not required
Quarterly and annual reports, annual certification	Required	Required	Required

Two notes on that table. First, the current OTCQB Rules (V6.1, Sept. 17, 2026) match the chart: a $0.05 minimum bid at the close of each of the 30 consecutive calendar days before admission, then a $0.01 minimum bid on at least one of every 30 consecutive calendar days to stay on the tier. Second, OTCQB’s rules also require at least 50 beneficial shareholders each holding at least 100 shares, audited financials by a PCAOB-registered auditor, and a verified company profile. OTCQB admits SEC reporting companies, Regulation A reporting companies, certain international companies and banks, and companies using OTC Markets’ Alternative Reporting Standard.

The bottom tiers

• Pink Limited. OTC Markets describes it as a market where broker-dealers can publicly quote securities with limited to no issuer involvement. Companies do not certify compliance with reporting standards and may have limited disclosure available.
• Expert Market. Quotes are restricted. OTC Markets says only broker-dealers and professional or sophisticated investors can view them. A security can be placed there when OTC Markets cannot confirm that current information is public under Rule 15c2-11.
• Caveat Emptor. A separate warning label OTC Markets uses where there may be reason for extra care, for example promotion without adequate current information or undisclosed corporate actions. It replaces the tier designation on market data.

See pink sheets for the history of the lowest tier and how the old names map to the new ones.

Rule 15c2-11: why some quotes disappear

Rule 15c2-11 governs when a broker-dealer can initiate or resume quoting an OTC security. Broadly, the broker needs specified issuer information, which must be current and publicly available, before publishing a quotation. The SEC adopted amendments to the rule in September 2020, with a compliance date of September 28, 2021. OTC Markets reported that 2,247 securities formerly in its Pink No Information category moved to the Expert Market after that date.

OTC Markets says the rule covers quoting, not whether an investor can trade. In its words, the rule “does not apply to the underlying transactions or the ability of an investor to buy or sell a security.” Brokers can still publish unsolicited customer limit-order quotes in some circumstances.

The rule text lists exceptions. One example in paragraph (f)(3) is a limited exception for continuing quotes on a security with a history of two-sided quotes, but not for an issuer subject to an SEC trading suspension until 60 calendar days after it expires, or for a company the broker has reason to believe is a shell, other than within 18 months after the initial quotation. See shell company and SEC trading suspensions.

Before a broker first quotes a security, it files with FINRA under Rule 6432 (the “Form 211”), and cannot start quoting until FINRA has processed the form.

What to check in the filings

The tier tells you where to look; EDGAR tells you what is true.

1. Search the company on EDGAR. SEC reporting companies and Regulation A reporting companies file there. If you find no 10-K or 10-Q, the company may use OTC Markets’ Alternative Reporting Standard and post disclosure only at OTC Markets, or it may have no current disclosure at all.
2. Read the latest 10-K or 10-Q cover page. It shows shares outstanding on a recent date and whether the registrant is a shell company.
3. Look for 8-Ks on corporate changes. Name changes, reverse splits, new auditors and changes in control matter because OTC Markets requires prompt updates to company profiles for some of them. See how to read an 8-K.
4. Check late-filing notices. Forms NT 10-K and NT 10-Q in the filing list show missed deadlines. Missing filings can drop a company from OTCQB, which requires being current in reporting.
5. For uplisting plans, look for a Form 8-A or an S-1 or S-3 tied to an exchange listing. See uplisting from OTC to Nasdaq.

Illustration: reading a tier change

Illustration with made-up numbers: a company quoted on OTCQB has 40M shares outstanding and a $0.30 bid, a $12M market cap. OTCQX needs $25M initial, so it does not qualify no matter how complete its filings are. If it then files late and its bid stays above $0.01, it may be removed from OTCQB under the “current in reporting” rule and move to a lower tier. The tier moved because of disclosure, not because of price.

Red flags vs normal

Usually normal	Worth checking
A company on OTCQB with a sub-$1 price	A tier downgrade (OTCQB to OTCID, Pink Limited or Expert)
An annual fee paid to OTC Markets for a tier	A Caveat Emptor label
A thin bid-ask spread of a few cents	A quote that vanished after a rule change or filing lapse
Alternative Reporting disclosure on OTC Markets	No disclosure on either EDGAR or OTC Markets

For the stock-level mechanics that follow from this, see penny stocks. For brokers, see best OTC stock brokers.