OTC MARKETS GROUPOpen /// Transparent /// Connected

Electronic Venture Markets

May 2015

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Our Mission: To create better informed and more efficient financial marketplaces

OTC Markets Group Inc. (OTCQX:OTCM)

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Global Leader in Exchange Graduations

Market 2014 Graduates to Main BoardsOTCQX, OTCQB and OTC Pink - US 83TSX Venture - Canada 22LSE AIM Market - UK 5

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Small Companies Need Liquidity

Cumulative Average Order Book by Market Capitalization

Source: SEC.gov

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Individuals Own Small Companies

Percentage Ownership of Exchange-Listed CompaniesMarket Cap (millions)

Median Institutional Ownership

Median Individual Ownership

$0-50 10.9% 89.1%$51-100 19.9% 80.1%$101-250 31.3% 68.7%$251-500 43.7% 56.3%$501-1000 62.4% 37.6%$1001+ 83.5% 16.5%

Source: SEC.gov

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Individuals Are Well Served By Online Brokers

Source: Barron’s

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Retail Investor Orders ♥

Market Maker Trade Quality

“Like malls losing shoppers to nearby Costcos, exchanges lost out to market makers in the competition for retail market orders.”  Barron’s

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Alternatives Expand Opportunities

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Enable Electronic Interstate Commerce

http://www.sec.gov/news/testimony/testimony-venture-exchanges.html#_ftn2

Electronic Venture Markets need national standards for:• Reg A+ Tier 2 Offerings Blue Sky Preemption• All fully SEC registered offerings • Secondary transactions in SEC reporting companies• Secondary transactions through broker-dealers • Registration of electronic broker-dealers

Unify markets with uniform securities regulations

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Unleash Venture Companies

• Finish JOBS Act Crowdfunding Rules• Establish a path for companies to provide current

information electronically• Modernize the “Penny Stock” Definition • Improve Internet Promoter Disclosure• Remove complexity and cost

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Broker-Dealer Ecosystem

http://www.sec.gov/news/testimony/testimony-venture-exchanges.html#_ftn2

• Support Small Brokers and Market Makers• Improve Point of Sale Disclosure • Update Reg SHO • Streamline the On-ramp for OTC Trading • Expand Margin Eligibility• Enable Technology and Transparency

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Steps to Investor Liquidity & Growth

Broker-Dealers 

Alternative Trading Systems

Exchanges