Understanding the Expert Market

The SEC’s amendments to Rule 15c2-11 will effectively eliminate public quoting in securities of issuers that do not make current information publicly available.  This means that without an alternative approach, such securities on the Pink Market will fall to the Grey Market.  The Grey Market is an opaque market where broker-dealers are not willing or able to publicly quote OTC securities given the lack of investor interest, company information or regulatory compliance.  OTC Markets Group has submitted a proposal to the SEC to operate an Expert Market as an alternative to the Grey Market. 

What is the Expert Market?

OTC Markets Group currently operates an Expert Market within OTC Link for a small number of companies.  However, the proposed Expert Market would operate differently. Following the upcoming changes to Rule 15c2-11, the Expert Market tier will include the broader group of companies that will no longer be eligible for public quoting under the rule and will serve the pricing and best execution needs of qualified investors.  Broker-dealers will be able to quote and trade Expert Market securities on OTC Link, however quotes in Expert Market securities will only be available to certain sophisticated investors, known as “Qualified Experts.”

Why is the Expert Market Important?

The Expert Market will offer an alternative to the Grey Market: a regulated trading venue where Qualified Experts can value these securities, access transparent price discovery and receive best execution through their FINRA member broker-dealer. Without an electronic platform to source liquidity, brokers have difficulty satisfying their best-execution requirements in Grey Market securities.  It also offers regulators valuable insight into quotation activity that would otherwise be hidden in the opaque Grey Market.

Who is considered a Qualified Expert?

Qualified Experts include broker-dealers, institutions and accredited investors.

How are Companies affected by these Changes?

The answer to this depends on the market on which your securities trade. For companies that trade on the Pink Market, the guidelines and procedures will change to ensure that the current information required under the Rule is available on an ongoing basis.  If your security trades on the Pink Market, you risk being shifted to the Expert Market unless you take the necessary steps to make current disclosure available.  Visit the Information for Pink Companies section of our website for further details.

What are the Key Dates for the Implementation of Rule 15c2-11?

Companies will need to provide the required disclosure to OTC Markets by June 30th.  This will ensure that our Issuer Compliance Team has sufficient time to review and update market status for a company’s securities prior to the rule’s compliance date on September 28th.

Securities that fail to comply will be removed from Pink as of the September deadline.

For more information on this rule and the steps your company need to take to comply, please reach out to sales@otcmarkets.com.


As Associate General Counsel, Cass supports regulatory and policy making initiatives at OTC Markets Group, focusing on equity market structure, online capital raising and emerging Fintech and RegTech trends. She represents the company on public panels and before regulatory and legislative groups. Prior to joining OTC Markets Group, Cass represented issuers, broker-dealers and individuals in securities litigation, financing, and various corporate and regulatory matters. Cass earned her JD from Hofstra University School of Law and received her BA from Mount Holyoke College. Cass is a member of the New York Bar.

%d bloggers like this: