We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
Pink Sheet: A Comprehensive Guide to Its Legal Definition and Function
Definition & Meaning
A pink sheet refers to a daily publication that lists prices for over-the-counter (OTC) securities. It is compiled by the National Quotation Bureau and provides bid and ask prices for various OTC stocks, along with details about the market makers involved in trading these stocks. Companies that are listed on pink sheets do not have to meet strict listing requirements, which often means they are smaller or less established. The term "pink sheet" originates from the color of the paper on which the report was traditionally printed. Stocks listed on pink sheets typically have symbols that end with "PK."
Table of content
Legal Use & context
Pink sheets are primarily used in the financial and investment sectors, particularly in relation to securities law. They play a role in the trading of OTC stocks, which may not be subject to the same regulations as those listed on major exchanges. Legal professionals may reference pink sheets when advising clients on investments in these less regulated companies. Users can manage their investments and related documentation through resources like US Legal Forms, which provide templates for various financial agreements and disclosures.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A small tech startup that has not met the requirements for listing on a major exchange may trade its shares on the pink sheets. Investors can find its stock price and market maker information in the pink sheet publication.
Example 2: An investor looking to buy shares in a niche biotech company may consult the pink sheets to see the current bid and ask prices before making a purchase. (hypothetical example)
Comparison with related terms
Term
Definition
Pink Sheet
A publication listing OTC securities with bid and ask prices.
OTC Bulletin Board
A regulated quotation service for OTC securities that requires companies to meet certain reporting standards.
Exchange-Traded Securities
Securities listed on major exchanges that must meet strict regulatory requirements.
Common misunderstandings
What to do if this term applies to you
If you are considering investing in stocks listed on pink sheets, it is essential to conduct thorough research on the companies involved. You can utilize resources like US Legal Forms to access templates for investment agreements or disclosures. If your situation is complex, consulting a financial advisor or legal professional may be beneficial to ensure you make informed decisions.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.