It just got cheaper to trade on two over-the-counter exchanges.
OTC Link ATS, OTC Markets Group’s Securities and Exchange Commission-regulated Alternative Trading System (ATS) announced to its Finra member broker-dealer subscribers that on July 1, the operator is eliminating quote fees for securities quoted on OTCQX Best and OTCQB Venture, its top two marketplaces.
Quotes on National Market System (NMS) and TRACE eligible securities will remain exempt from quote position fees.
This reduction in fees is designed to lower the cost of market making in these securities and allow OTC Markets’ subscribers to trade more securities, and in turn, help increase the capital formation process for smaller but high quality companies.
Also, OTC Markets has introduced monthly pricing caps on bona-fide quotes and non bona-fide quotes in securities traded on OTC Pink, its entry level marketplace. Quote position fees for securities quoted on the OTC Pink marketplace will be charged at a rate per location of $0.20 per security per day for bona fide two-sided priced quote positions (“BF quote positions”) and $0.30 per security per day for all non-BF quote positions.
OTC Link BF quote positions will be capped at $10,000 (50,000 BF quote positions) per month, per location and non-BF quote positions will be capped at $15,000 (50,000 non bona fide quote positions) per month, per location.
These changes are designed to allow broker dealer subscribers to lower their costs by pricing more securities and after hitting the monthly caps, increase their quoting in more securities at no additional cost.
According to OTC Markets the elimination of quote fees on these securities combined with the monthly cap on quote fees for OTC Pink securities and the discounted bulk pricing for monthly trade messages on OTC Link ATS are designed to support broker-dealer quoting and liquidity in these securities.
These changes will lower the cost of market making in OTCQX and OTCQB securities and allow broker-dealer subscribers to expand their coverage of higher quality securities.
In contrast, OTC Link Messaging fees will increase to $1.50 per security per day to send and receive messages. The messaging fee will apply to all securities available for messaging on OTC Link ATS. There is no per message charge, no limit on the number of messages that may be sent or received for the same daily fee, and no charge if no messages are sent or received in a security. The following discounts are applied for OTC Link messaging usage during each billing month:
The discount applied for OTC Link Messaging Usage:
Up to 10,000 messages – No Discount
10,001 to 20,000 messages – 10%
20,001 to 30,000 messages – 20%
30,001 messages or greater – 35%
There are currently more than 120 broker-dealers subscribers actively quoting approximately 10,000 securities on OTC Link ATS, including KCG, Citadel, Archipelago, Canaccord Genuity, Automated Trading Desk and Jane Street, to name a few.