Pink Sheets
An OTC quotation system for stocks not listed on major exchanges, featuring lower regulatory requirements.
What is Pink Sheets?
Pink Sheets, now officially known as OTC Markets Group (Pink Open Market), is an electronic quotation system for stocks that are not listed on a national exchange such as NYSE or Nasdaq. These securities—often shares of foreign companies, small domestic firms, or companies that have been delisted—trade over the counter with fewer disclosure requirements than exchange-listed stocks. Pink sheet companies are not required to file regular financial reports with the SEC, making due diligence more challenging for investors. The name 'pink sheets' originated from the pink paper on which the National Quotation Bureau printed its daily listings of over-the-counter stock quotes before the system went electronic. OTC Markets Group now classifies its pink market into tiers: Pink Current Information, Pink Limited Information, and Pink No Information, based on the level of financial disclosure provided.
Example
Shares of a small foreign mining company not listed on a U.S. exchange may be quoted only on the Pink Sheets, where investors can trade them via broker-dealers but must accept wider bid-ask spreads, less liquidity, and limited SEC disclosure compared to a NYSE-listed stock.
Source: OTC Markets Group