Английский язык. Практический курс для решения бизнес-задач

Over-the-Counter (OTC)

OTC refers to markets other than the organized exchanges described above. OTC markets generally list small companies, and often these companies have «fallen off» to the OTC market because they were de-listed from NASDAQ. Some individual investors will not even consider buying OTC stocks due to the extra risks involved. On the other hand, some strong companies trade on the OTC. In fact, several strong companies have deliberately switched to OTC markets to avoid the administrative burden and costly fees that accompany regulatory laws such as the Sarbanes-Oxley Act.

There are two OTC markets:

Over-the-Counter Bulletin Board (OTCBB) is an electronic community of market makers. Companies that fall off the NASDAQ often end up here. On the OTCBB, there are no «quantitative minimums» (no minimum annual sales or assets required to list).

Companies that list on the pink sheets (i.e. less than 300 shareholders) are not required to register with the SEC. Liquidity is often minimal. Also, keep in mind that these companies are not required to submit quarterly 10Qs.

Source: Investopedia, September 24, 2004, David Harper, Contributing Editor

Essential Vocabulary

1.public stock – акция публичной компании

2. New York Stock Exchange (NYSE)

– Нью-Йоркская фондовая биржа

3. American Stock Exchange (AMEX) – Американская фондовая биржа

4. primary market – первичный рынок

5. float n – чеки в процессе инкассации; число акций корпорации, выпущенных на рынок; банкноты и монеты в кассе

float (a company) v – организовать новую компанию и выпустить ее акции на рынок

6. a.k.a. (also known as) – также известный как

7. secondary market – вторичный рынок

8. brokerage account – брокерский счет

9. trading floor – торговый зал

10. exchange traded funds (ETC)

– фонды, которыми торгуют на бирже

11. Board of Governors – Совет управляющих

12. incorporation n – инкорпорация; процесс регистрации юридического лица в качестве корпорации властями данного штата (США)

incorporate v – создать и зарегистрировать корпорацию; включать, придавать юридический статус

13. not-for-profit organization – некоммерческая организация

14. agency auction market – агентский аукционный рынок

15. maintenance requirements – минимальный уровень средств, который должен поддерживаться на маргинальном счете клиента у брокера

16. compensation committee – комитет по вознаграждению

17. audit committee – комитет по аудиту

18. floor broker

– брокер в зале биржи

19. consolidated tape – консолидированная лента

20. abuse n – нарушение, злоупотребление

abuse v – нарушать, злоупотреблять

21. delisting n – лишение котировки

delist v – лишать котировки

22. small capitalization (cap) – компания, которая по уровню капитализации на данном рынке считается малой

23. Electronic Communication Network (ECN) – сеть электронных коммуникаций

24. alternative trading system (ATS) – альтернативная торговая система

25. over-the-counter (OTC) market

– внебиржевой рынок ценных бумаг

26. pink sheets – список акций и их цен на внебиржевом рынке

27. 10Q form – квартальный отчет корпорации, чьи акции котируются на биржах, перед Комиссией по ценным бумагам и биржам

Exercise 1. Answer the following questions.

1. What are the functions of an exchange? 2. How did NYSE evolve over the years? 3. What are the advantages of the agency auction market? 4. What are the benefits of NYSE? 5. How are stocks bought and sold at NYSE? 6. What does market regulation mean in NYSE’s context? 7. What are the key characteristics of NASDAQ? 8. What are ECNs? 9. Why do some individual investors prefer not to buy OTC stocks?

Exercise 2*. Which of the following statements are not correct and why?

1. A stock exchange owns shares of companies listed there. 2. The exchange tracks the flow of orders for each stock, and this flow of supply and demand sets the price of the stock. 3. In an agency auction market the share price is determined by a dealer who buys and sells out of inventory. 4. Investors trading on the NYSE have no protection against abuses. 5. Buyers and sellers at NASDAQ operate the trading floor. 6. Currently, ECNs do not really serve individual investors; they are mostly of interest to institutional investors. 7. Individual investors prefer to buy OTC stocks because of high possible returns.