An OTC market is also known as the over-the-counter market.
Completely different from the exchange market, an OTC market has no physical location, no prescribed membership, no strictly controllable rules and regulations, and no prescribed trading products and restrictions. In OTC markets, transactions are mainly entered into between two parties through private negotiations.
Well-known OTC markets in the world include the Over-the-Counter Bulletin Board (OTCBB) and the OTC Pink Market (pink sheets) in the US; the Alternative Investment Market (AIM) in the UK; the over-the-counter market (CMF) and Paris New Market in France; the over-the-counter market in South Korea; the China Interbank Bond Market, etc.
The OTC markets in the US is huge, accounting for about 3/4 of the securities traded in the US.
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