OTC Markets for Canadian Juniors: OTCQX, OTCQB, OTCID and Pink

Introduction

Look up almost any TSXV or CSE junior and you will often find a second symbol quoted in US dollars. That is an over-the-counter (OTC) quote, most often on one of the markets run by OTC Markets Group.

A US quote can make it easier for American investors to buy the shares. It also invites confusion. It is not a US stock exchange listing, it is not an endorsement, and the tier a company sits in tells you something about its disclosure, not its prospects. This guide explains the basics. For the Canadian side, see our guide to the TSX, TSXV and CSE.

A US quote is a second door into the same company. It does not make the company any different.

Why Canadian Juniors Trade in the US

A US quote lets American investors buy a Canadian company's shares in US dollars, in a US market, through a US broker, rather than trading on a Canadian exchange.

The shares are the same class as those trading in Canada. A US buyer and a Canadian buyer own the same thing.

Because the US quote is in US dollars and the Canadian listing is in Canadian dollars, the two prices are not directly comparable without converting one of them. Small gaps between them after conversion are normal, since each market has its own buyers and sellers.

How a Canadian Company Can Trade in the US Without SEC Registration

US securities law generally requires larger companies with many US holders to register with the SEC and file US reports. Foreign private issuers have an exemption under Exchange Act Rule 12g3-2(b). As the SEC set out when it amended the rule in 2008, an issuer can rely on it if, among other conditions:

• it maintains a listing on one or more non-US exchanges that form its primary trading market;
• it does not already have SEC reporting obligations; and
• it publishes its required home-country disclosure in English, on its website or through a public electronic system in its primary market.

The SEC said the exemption allows a foreign private issuer's equity securities to trade in the US over-the-counter market without registration under section 12(g). Listing on a national securities exchange still requires registration. For a Canadian junior, the home-country documents are the filings already on SEDAR+.

The Tiers

OTC Markets Group sorts securities into markets based on the information a company provides and the standards it meets. In broad terms:

• OTCQX Best Market. OTC Markets' requirements for international companies include a listing on a qualified foreign exchange, minimum bid price and market capitalization tests, and meeting an exemption from the US penny stock rules, such as a net tangible assets or revenue test.
• OTCQB Venture Market. The tier many Canadian juniors use. Under the OTCQB Rules, an international company can qualify if it is exempt from SEC registration under Rule 12g3-2(b) and listed on a qualified foreign exchange. It must meet a minimum bid price test, verify its company profile, and file an annual certification of its 12g3-2(b) compliance, among other requirements.
• OTCID Basic Market. Launched by OTC Markets Group on July 1, 2025, replacing the Pink Current Market. It is aimed at companies that report regularly, with requirements including periodic financial reports, management certifications and current company profile information.
• Pink Limited Market. A caution tier for securities with limited or no company involvement, or limited, outdated or inconsistent disclosure.
• Expert Market. Securities that do not meet basic SEC Rule 15c2-11 information requirements. OTC Markets says quotes there are not available to retail investors.

Which exchanges count as "qualified foreign exchanges" is set by OTC Markets Group in its own published list, so check that list rather than assuming. The rules for each tier change from time to time; the current versions are on OTC Markets Group's website.

DTC Eligibility

In the US, most share trades settle electronically through The Depository Trust Company (DTC). A security that is DTC-eligible is held at DTC, through certificates registered in the name of DTC's nominee, Cede & Co., and can be delivered and settled by book entry between DTC's participants, which are the brokers and banks that use it.

Without DTC eligibility, a US broker may not be able to settle trades in a stock electronically, which can make it difficult or impossible for many US investors to buy. That is why companies often announce it when they obtain DTC eligibility.

DTC eligibility is an operational status. It says nothing about the company's finances, management or project.

What a US Quote Does and Does Not Mean

A US quote or an upgrade to a higher tier can mean:

• more US investors can buy the shares easily;
• the company meets that tier's disclosure and eligibility rules;
• the company is paying the fees and doing the work to stay there.

It does not mean:

• that the company is listed on a US stock exchange;
• that the SEC has reviewed or approved the company;
• that there will be more trading or a higher price. A quote does not create buyers, and volume on a US quote can be low.

The company's main disclosure, including its NI 43-101 technical reports, financial statements and MD&A, remains on SEDAR+. Insider trades by Canadian reporting insiders are reported on SEDI.

What to Check

• The primary market. Which exchange is the main listing, and where most trading happens.
• The tier. OTCQX, OTCQB, OTCID or Pink Limited, and whether OTC Markets shows the company as current in its disclosure.
• Currency. US quotes are in US dollars. Compare like with like.
• Liquidity. Daily volume on the US quote compared with the Canadian market.
• Promotion. If you see paid coverage of a company, read who paid for it and how much, and rely on the company's own filings.

A US quote can broaden a company's audience. It does not change the company. For decisions, start with SEDAR+ and speak with your own adviser.