Over-The-Counter "OTC" Program

What is the Over-the-Counter?

Over-the-counter (OTC) refers to the process of how securities are traded for companies that are not listed on a formal exchange such as the New York Stock Exchange (NYSE). Securities that are traded over-the-counter are traded via a broker-dealer network as opposed to on a centralized exchange. These securities do not meet the requirements to have a listing on a standard market exchange.

Trade transactions take place through the Over the Counter Bulletin Board (OTCBB) or the Pink Sheets listing services. The OTCBB is an electronic quotation and trading service that facilitates higher liquidity and better information sharing. A Pink Sheet company is a private company that works with broker-dealers to bring small company shares to market.

Over-The-Counter "OTC" Program

What is the OTC Network?

The OTC Markets Group operates some of the most well-known networks, such as the Best Market (OTCQX), the Venture Market (OTCQB), and the Pink Open Market. Although OTC networks are not formal exchanges such as the NYSE, they still have eligibility requirements. For example, the OTCQX does not list the stocks that sell for less than five dollars—known as penny stocks—shell companies, or companies going through bankruptcy. The OTCQX Best Market includes securities of companies that have the largest market caps and greater liquidity than the other markets.

Through the OTC marketplaces, you can find the stocks of companies that are small and developing. Depending on the listing platform, these companies may also submit reports to the Securities and Exchange Commission (SEC) regulators. OTCBB stocks will usually have a suffix of "OB" and must file financial statements with the SEC.

Another trading platform is the Pink Sheets and these stocks come in a wide variety. These businesses do not meet the requirements of the SEC. While buying shares of this nature may involve less transactional costs, they are prime for price manipulation and fraud. These stocks will usually have a suffix of "PK" and are not required to file financial statements with the SEC.

Although NASDAQ operates as a dealer network, NASDAQ stocks are generally not classified as OTC because the NASDAQ is considered a stock exchange.

The Steps that make up the OTC Process

JSX has established strategical relationships with several offshore broker dealers (“OBD”) and North American broker dealers (“NABD”). In turn, these broker dealers have settlement and clearing relationships with well-established custodians that are based in Canada, the USA and Europe.

Based on past conversations with individuals and entities looking to transact in the OTC space, the biggest challenges they have experienced over time are finding a Provider that will work with them throughout the entire process, and finding a Solution that will be around for the long-term.

In the JSX model, we have aligned ourselves with committed strategic partners who have expressed an interest and desire in growing and servicing the OTC market for the long-term.


Complete Intake
Information Form

You provide ticker symbol, stock exchange, desired loan amount and number of shares to be pledged.


Find an Offshore
Broker Dealer

After a thorough and fulsome conversation(s) with the prospective client, JSX will determine the most appropriate OBD to have the client open a brokerage account.


Introduction to OBD
and Documentation

JSX sends the prospective client an introductory email that would identify the OBD, and it would include all the pertinent new account documentation that would need to be completed.

DURATION: 5-7 business days after submission


Account Approval and
DWAC or DRS Documentation

Once the account has been approved, the client would then need to provide the required documentation to complete the DWAC or DRS.

DURATION: 2-5 business days if all goes well


Approval by Compliance
and Custodians

Once the documentation was reviewed and approved by the OBD Compliance Team and/or NABD Custodian, the position would then be allowed to DWAC or DRS.

DURATION: 2-5 business days if all goes well


Sell Position
through OBD

Once the DWAC or DRS has been successfully completed, the OBD will advise the client, who would then be permitted to sell the position. Once the client has given the OBD with trade instructions, the OBD will then convey said instructions to the NABD for execution.

DURATION: Will vary based on period to sell position


Trade Execution
and Sale Proceeds

Once the trade(s) are successfully executed, the OBD’s institutional account will be credited with the total sale proceeds of the transaction less the applicable commission fee.

DURATION: Trade Date + 2


Fund Settlement
and Wire Transaction

The client can then instruct the OBD to wire the proceeds to his / her bank account, but the client would need to provide all the pertinent bank and wire details to the OBD.

DURATION: 24 to 36 hours

Pay Day! The Process is COMPLETE.

You are now in possession of your funds. You can transfer them. You can withdraw them. The Lender does not control how you use the funds or the country that you choose to receive the funds.

The PROS and CONS of the OTC Marketplace

  The OTC Pros

  • OTC provides access to securities not available on standard exchanges such as bonds, ADRs, and derivatives.
  • Fewer regulations on the OTC means that more companies can enter the marketplace, who typically cannot, or choose not to, list on other exchanges.
  • Through the trade of low-cost, penny stock, speculative investors can earn significant returns.

  The OTC Cons

  • OTC stocks have less trade liquidity due to low volume which leads to delays in finalizing the trade and wide bid-ask spreads.
  • Fewer regulations means less access to available public information, the chance of outdated information, and the possibility of fraud.
  • OTC stocks are prone to make volatile moves on the release of market and economic data.

... Let's Succeed ... TOGETHER!

We have established global strategic relationships with a number of Broker Dealers, Lenders, and Private Equity Funds. Let us SOURCE your FUNDING REQUIREMENTS.