National Quotation Bureau (NQB)

By
rjonesx
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What is ‘National Quotation Bureau – NQB’

A company established in 1913 to compile and publish price information on stocks and bonds traded in the over-the-counter market. The National Quotation Bureau (NQB) was formed by financial book publisher Arthur F. Elliot and financier Roger Ward Babson. NQB was sold to Commerce Clearing House in 1963, which sold it in 1997 to a group of investors led by Cromwell Coulson. In 1999, the NQB introduced its real-time Electronic Quotation System for trading OTC securities, completing its transition from the print medium to the electronic one. The NQB was renamed Pink Sheets LLC in 2000, which in turn became Pink OTC in 2008. Eventually it changed the name to OTC Market Group in 2011.

Explaining ‘National Quotation Bureau – NQB’

The National Quotation Bureau was one of the prime originators of the ubiquitous “Pink Sheets”, since it published stock information on pink paper and bond data on yellow sheets.
 
NQB’s roots date back to 1904, when Roger Babson – the founder of Babson College – founded a statistical organization that compiled and disseminated bond-offering circulars in a monthly publication to brokerage houses in New York, Boston, Chicago and other financial centers. Meanwhile, Arthur Elliot had started a firm in 1911 that daily compiled price and volume data from brokerage offices that were active in the over-the-counter (OTC) market. The two complementary services subsequently merged to form the NQB.
 
While it may be hard to appreciate the fact in the present era of free real-time quotes and instant information, the NQB provided a very valuable service more than a century ago by packaging scarce data and making it available to dealers and investors. In doing so, it also sidestepped the virtual monopoly that entities such as the New York Stock Exchange had on price data.
 
The reason for “Pink Sheets” becoming virtually synonymous with speculative OTC securities, despite its illustrious founders, is not clear. It may have been largely due to the preference over the years of most companies to be listed on an exchange – rather than trade OTC – because of the increased transparency and liquidity available on stock exchanges.
 

National Quotation Bureau (nqb) FAQ

What is Otcbb trade?

The OTCBB is an electronic quotation and trading service facilitating higher liquidity and better information sharing.

What is the difference between OTC and Otcbb?

While NYSE functions as auction markets, the OTC market is dealer-driven. The OTCBB provides real-time securities data for 1,000 securities and is used by 80 market makers. Although FINRA oversees its daily operations, the SEC regulates OTCBB.

What is pinx?

Pink sheets refer to a listing service for stocks trading via over-the-counter (OTC). Pink sheet listings are companies not listed on a major exchange like the New York Stock Exchange (NYSE).

Are OTC stocks safe to buy?

OTC stocks are usually highly risky microcap stocks (shares of small companies with market capitalizations of under $300 million), which include nanocap stocks (those with market values of under $50 million). The SEC has always warned investors about the high risks associated with stocks like that.

What are the different OTC markets?

OTC securities are in three tiers: OTCQX which has the most stringent listing requirements, the OTCQB which is the venture market, and the OTC Pink which includes companies in financial distress or bankruptcy. OTC Pink is the largest of the three in terms of the number of companies and trade volume.

Are Pink Sheet stocks safe?

Pink sheets stocks lack liquidity and are often thinly traded, which can make them volatile. The bid-ask spread is wide, and investors need to be patient and cautious when putting in any buy or sell order.

Further Reading

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