OTC Markets Group Inc. (OTCM) Earnings Call Transcript & Summary

Good morning, and welcome to OTC Markets Group's Inaugural Investor Day. My name is Kristie Harkins, and I'm the Chief Marketing Officer here at OTC Markets Group. As a starting point, I'd like to share that today's presentation may contain forward-looking statements. For more information, please refer to the cautionary statement regarding forward-looking statements included in our presentation materials. We have an exciting agenda for you today, which we're going to kick off by sharing our corporate video, followed by a welcome and company overview from our President and CEO, Cromwell Coulson. With that, we'd like to kick off today's events. [Presentation]

Welcome to the OTC Markets Group Virtual Investor Day. It is a pleasure to share our perspective on our business operations. We have grown significantly over the years from what was a turnaround situation into a technology-driven, highly regulated, mission-critical, financial market infrastructure provider and a publicly traded company on our OTCQX market. As CEO, I am a significant shareholder in the company. With widespread employee, officer and director share ownership, we are all focused on building long-term shareholder value by offering our broker-dealer and corporate clients a compelling service proposition. I am proud to say many of our original shareholders, who are highly sophisticated investors, are still owners today. We have all benefited as we've grown the value that we provide for public markets. Today, we will put more sunlight on the technology and data platform we have built and the opportunity to use our mission-critical infrastructure to continue improving public markets and growing our company. Our mission is straightforward: to create better informed and more efficient financial markets. Our strategy or how we uniquely execute our mission is to operate world-leading securities markets. We share information widely through open networks that foster transparency. We connect broker-dealers, organize markets and inform investors. We deliver elegant, reliable and cost-effective subscription-based technology solutions for a future that is online, data-driven and social. The core OTC values are aligned with our role as a highly regulated operator and as an innovative public company. We live them every day. We offer a platform to be public with 3 complementary business lines: regulated trading, market data and corporate services. We deliver mission-critical trading infrastructure for broker-dealers. We bring the benefits of public trading to a wide spectrum of securities and we can efficiently fulfill the capital formation needs of a broad range of U.S. and global companies. The core of OTC Markets Group is the mission-critical infrastructure and cost-effective services we provide U.S. markets as an operator of broker-neutral, SEC-registered and FINRA-regulated alternative trading systems. By connecting broker-dealers, organizing markets and incentivizing disclosure and information availability, we provide broker-dealers with a range of tools and services and data, so they can trade more efficiently with better information. Our market data business distributes useful and unique information that connects our markets and integrates our data into the screens and machines of brokers, investors and regulators. So what was an opaque market is now more transparent, electronic and better regulated. Our Corporate Services business line, a platform of services that empowers companies to be public and serves as a global gateway to access U.S. investors. As a public company ourselves, we want to make it easier for companies to be public. Our OTCQX Best Market and OTCQB Venture Market, offer an alternative path for companies to go and be public. By using our data-driven market standards and technology platform, companies can ensure their investors have access to high-quality disclosure materials that are useful to investment decision-making. We provide the organization that is now recognized by state and federal securities regulators to monitor ongoing financial reporting. We offer data distribution infrastructure to connect public companies with brokers, regulators and investors. Our platform empowers public companies to ensure their business operations, financial condition, and corporate governance are clearly understood by investors and key stakeholders. Being public and transparent allows companies to demonstrate compliance with federal and state securities laws. Today, you will hear the senior executives of OTC Markets Group walk through how they manage our business lines. As a network-based platform, we all work together to help facilitate the success of our overall operations and the value of our customer offerings. I'm excited to hear your questions and provide clarity at the end of our presentation. Thank you.

Good morning. I'm pleased to be joined with Jason Paltrowitz, who's our EVP of Corporate Services. Jason, welcome.

Thank you. Great to be here.

Excellent. So just to kick things off, I'd love to just talk a little bit about the role our Corporate Services plays within OTC Markets and really how that's evolved over time.

Sure. So Corporate Services is really the companies that trade on our market, and it's the offering and the platform through which they're allowed to kind of meet their investors. So if you think of it in terms of a traditional exchange, it's the listings business. It's the companies that want to engage their investors that want to provide best practice investor relations that want to be open and transparent and provide a public market, so their investors can see the value of their investment and be able to trade, buy and sell that investment and have access to kind of the best information available from an investment perspective.

And how would you say that's changed kind of over time?

Well, I mean, it's changed dramatically since I've been here, if you think about the evolution of OTC Markets, generally. The OTCQX business was launched in 2007, the OTCQB business sometime in 2013, 2014. And so if you look at the market's evolution over time, you'll see significant change to providing transparency and information to investors so that investors can make informed investment decisions. And that really is a change that we've seen both on the structure of our markets, going from paper-based, phone-based to electronic. But really the engagement that we now have with issuers and the way issuers see our markets as their gateway to meeting those investors. So while we have that Pink open market on the bottom here, which is really that broker-dealer driven market, right, that comes from demand of investors. When you start looking at our premium markets, our OTCQB and QX markets, those are the markets where investors -- where issuers, I'm sorry, are really owning the investor experience. So our QB market, as the slide points out, our venture market is companies -- early-stage companies that really want to put best foot forward, be proper corporate citizens, learn how to be public companies and engage their investors in the best possible way with the lightest touch, kind of corporate governance and disclosure requirements necessary to be a public company, really meeting the needs of what does an early-stage company need to do to be kind of best practice public company. As you upgrade to our QX market, what we call our Best market, that's really our highest tier and the highest level of disclosure, transparency, corporate governance and rules around the types of companies that trade there. So both of those markets are really about transparency, disclosure, rules and regulations to really show that they're investable from an investment perspective.

And tell me a little bit more about sort of how the companies break down when you think about the QX market. What are the main types of industries or the types of sectors that we tend to see?

Yes. So it's interesting. Our QX market kind of services a wide breadth of company types. And we -- first, we split it out between kind of U.S. domestic companies and international companies. On the domestic side, you're really talking about kind of smaller companies, public companies, maybe companies that aren't yet ready to be on a national exchange, but where our market kind of meets the needs of where they are for being able to whether it's raise funds or service their investors. We have a large group of community banks as a good example, companies that don't necessarily need all of the things that are required to be on an exchange. So from a domestic perspective, it really is a market that fits the needs of those types of companies. From an international side, it's a little different. We have some of the world's leading global brands that are already listed on their home market exchanges, whether it's Adidas or Heineken or Roche or Marks & Spencer that are already meeting their local market disclosure and transparency requirements, but they still want to access the U.S. and the largest pool of investment capital possible. And they use our markets as a secondary trading venue, where they can leverage their home market disclosure but still provide U.S. investors the opportunity to trade in U.S. dollars during U.S. market hours and make their information available on all of the kind of sites and places where U.S. investors do their investment research.

And what did we see last year just in terms of the overall numbers of companies kind of joining, whether it was the QX market or the QB market?

Last year was an interesting year, not least of which it was the COVID year. And so generally speaking, we started the first half of the year, it was slow, right? I think corporates generally around the world, U.S. as well as internationally, kind of were taking pause to see how we were going to shake out. And so from a Corporate Services perspective, we had a really a slower start to last year than we had, had traditionally. As we saw kind of markets equalize the second half of the year, we saw tremendous growth. So overall, last year, we saw 345 companies come to our market. And then again, domestic, international, from small caps to mega caps. But really, the bulk of that was in the second half of the year, 242 of those companies were kind of in the second half of the year. What was interesting is, as you looked at it, again, the first half of the year, companies were taking pause. By the second half of the year, there were a couple of things at play. First, the markets generally held steady and actually grew. So corporates really wanted to be able to leverage that investment, the markets in order to grow as they saw that the markets were equalizing. It was also interesting in that retail investors became kind of the flavor of the day, right? Traditionally, in our markets, people didn't want -- or issuers weren't that keen to reach out directly to retail investors. But we saw a trade-off for its trading trends last year, where retail investors became more important. And so we saw significantly more issuers come into play to use our markets to try to access U.S. retail investors from around the world.

So Jason, one of the other things I think it's important to touch on, I think you did a great job kind of highlighting really where is the value in the QX market and what do companies choose the QB market for and then the broker-driven market in Pink. But I think it's also important to just talk about some of the other products and services that your Corporate Services team offers that -- the client relations role that we have as well just to kind of broaden out that picture.

Yes. For us, it's really about helping companies meet the needs of servicing their investors. And whether it's companies that meet the requirements of QX or QB or maybe it's companies that don't meet those requirements or don't necessarily need or want the services that we offer in those markets, it really is about helping companies be better public companies. And so we offer a number of other services, including just the QX and the QB. For our Pink companies, we offer what we call our disclosure in new service, that allows them to be current in their disclosures. So at least they're making their information current and available and they're adding a base layer of transparency that allows them to service investors. We also offer companies the ability to see what their Blue Sky status is. That's important pieces of information as they're going out and trying to build their shareholder base or raise money around the United States to see the states in which they are Blue Sky eligible. We give companies the ability to put Level 2 quotes, to open up Level 2 quotes to the public and to have those on their website. Again, Level 2 quotes is important for investors to be able to see what a security is worth and how deep the market is. And then, of course, for our QX and QB, and even Pink companies, we have a number of visibility services, including our virtual investor conferences platform that gives companies the ability to tell their story virtually to a very broad and diverse shareholder base -- investor base. That actually -- that business proved very significant last year as companies weren't able to travel as much and things like Zoom, like we're doing now, became the way in which people engage their investors, the virtual investor conference platform. So saw significant growth last year as companies leverage that to be able to talk to their current shareholders but also work to expand their shareholder base.

And I think to that point, I mean one of the things that we should just focus on a little bit is just aside from giving those markets that obviously are allowing companies to provide that disclosure, there's also really that access for investors and the visibility solutions that we help to provide in order to really frame out an investor's understanding of one of these companies that chooses to trade with us. So can you talk a little bit about visibility and how we think about that?

Sure. There's a -- there's an old saying that stocks are sold, they're not bought, right? And so from an investor relations perspective, if you're a corporate, you have to work really hard sometimes to get the eyeballs of investors, right, if you're looking to grow your shareholder base, if you're looking to bring more capital into your company. And so what we try to do for our QX and our QB companies is to give them kind of a base level of visibility so they can incorporate that into their Investor Relations program. And so we do things like a video series for our QX companies. We do the virtual investor conference platform. As I said, we're doing press release and social media outreach. We're doing a number of things that help companies tell their story, but then also transport whatever they're doing if you're an international company in their local markets and transport that across into the U.S. to make sure that if you are doing a video or a promotion in Germany, I see we have BASF up here, that we're allowing that to be distributed into the U.S. as well, whether that's a press release or a video. And so we work very closely with our companies, usually with their investor relations officers, their investor relations team or their CFO, CEO, to try to understand what they're hoping to accomplish by being traded on our platforms and then see where we can fill that in to leverage the visibility tools that we have to help them.

And I think we've certainly seen, within this past year, all of those kind of virtual solutions, be it the video series, be it the podcast, be it the virtual market opens, certainly something that companies are much more willing to leverage and engage with just given we're all kind of living in this virtual world at this point.

Yes. Well, companies are being forced to make real changes in how they do things, whether it's travel, whether it's rethinking their budgets, their investor relations budget, whether, like I said, thinking about the types of investors they're looking to attract. As I said, retail investors are becoming more and more important for companies as a -- as an investor they want to have on their books. And so the things that we can do to help them with that, again, whether it's an international company that doesn't necessarily understand the U.S. landscape or whether it's a community bank that's looking to expand its investor base beyond its community, these are the tools that we can bring to bear to help. And it's also years of experience. One of the things that we help companies with is simply because we have so many companies that trade on our platforms. And so we've kind of seen what works and what doesn't work, and we can bring our companies together and we can bring the common experience of being a public company to help our clients, our prospects use the tools to be successful in their own right.

Yes. I mean, I think education plays such a critical role in the types of things that we're doing and sharing on an ongoing basis. It's not just about visibility, but to your point, how do we really help these companies grow within the public market space.

Yes. And we do a significant number of educational webinars. I think Kristie, you and I, obviously, as our CMO, are working very closely. But our -- things aren't on here, the educational webinar series that we do, the events and the conferences that we participate in, really are about educating, a, issuers on the public markets that are available to them, but also investors on the types of securities, investable securities that are available to them, whether it's how the market works, how to provide best practice investor relations, the importance of ESG research, investor relations. All of those things play an important role within the Corporate Services business and the services that we provide.

Well, thanks, Jason. I think that's given everyone that's watching us live some good food for thought, and we'll be back together a little bit later for our Q&A session.

Looking forward to it.

Thanks so much.

Thanks, Kristie.

Hi, I'm Dan Zinn, the General Counsel of OTC Markets Group. I'm joined here by my colleague, Lis Heese, who is our EVP of Issuer and Information Services and runs our Washington, D.C. office. Thank you all for joining us today. Lis, given your role and the work that your team does, maybe you can start by reviewing a little bit about our market standards and what your team does to ensure that investors have access to good company information.

Sure. Hi there. OTC Markets has developed its Corporate Service business with 2 overarching goals: to provide a platform for all OTC-traded companies to tell their stories to the market; and to improve the information available to investors so they can make better informed decisions. So we're creating better informed and more efficient financial markets by segmenting the market and by ensuring that investors know when a company has current disclosure publicly available and when they do not. So the way that we have organized our marketplace, the companies in our marketplace is into 3 different tiers. The Best market, the OTCQX market, is for established and investor-focused companies. Today, there are about 530 securities trading on our OTCQX market. These are all companies that have met high financial standards. They practice best -- they have best practice corporate governance standards in place. They all have current disclosure available for investors, and there are no -- they have to be operating companies. There are no penny stocks or shells or bankrupt companies qualified for OTCQX. Our second tier is our OTCQB market. This is geared towards early-stage and developing companies. There are about 1,006 securities on OTCQB today. These companies don't have -- they don't have to meet high financial standards, but they're -- the market is really organized around making sure that there's current disclosure for these companies and that we -- investors have a good idea who is operating the company, who the officers and directors and insiders are for OTCQB companies. We do have to have audited financials. There's a $0.01 minimum bid price and companies on QB have to do an annual verification and management certification. Our third marketplace is our Pink market. There are -- and there's just a wide range of companies with various levels and timeliness of disclosure in this market. And so what we do for the companies in this market is we identify them strictly based on the disclosure that they make available, not -- there are no financial requirements at all. So companies are either put into current information, limited information or no information, just strictly based on the disclosure that they have available for investors. So our issuer team -- Issuer Services team monitors the disclosure of about 11,000 OTCQX, QB and Pink companies today to appropriately classify them into these markets. We understand there's just a - there's a very wide diversity of companies in our markets. And therefore, we recognize that there's a variety of -- a diverse variety of disclosure schemes that companies use to make their information publicly available, and we recognize for different categories of disclosure. The first is SEC reporting. These are companies that make their disclosure available on the EDGAR system for everyone to see. We monitor the filings there and we can determine whether a company is current or not in their required filings. The second category is our international reporting standard, companies that are listed on a qualified exchange, and they make their disclosure publicly available in English. The same information in the U.S. that they make to their investors in their home country can qualify for our markets using their international reporting disclosure. Our third category is bank reporting. And so banks that make -- banks already have a sort of intense regulatory regime here in the United States. So banks that are making their current reports available to their U.S. banking regulator will satisfy the disclosure requirements that OTC Markets has in place for current information as well. The final group of -- the final reporting standard that we recognize is what we call the alternative reporting standard. And this is meant for companies that sort of don't naturally fall into one of those other buckets. They're not SEC reporting, they're not on an international -- they're not an international company on a foreign exchange and they're not banks. And these are companies that choose to make disclosure available pursuant to guidelines that OTC Markets has developed. And they put together disclosure statements and financial reports and they publish them through our platform to make them publicly available to investors. So these are -- these are the 4 types of reporting that we recognize. And OTC Markets uses those standards to organize the companies and provide -- make sure that investors have access to their disclosure.

So Lis, thanks. And that's a lot of good information about the specific disclosure that companies are making publicly available. But I know your team focuses on more than just that kind of transparency, but also providing additional information to investors related to maybe other compliance areas or other things where we can survey the market and maybe have access to a certain amount of information that we can provide to investors. So if you can talk a little bit about kind of that other side of what your team does.

Sure. In addition to reviewing company's disclosure sort of on an ongoing basis, we also are evaluating their compliance with our marketplace rules. We are monitoring for stock promotion and other public interest concerns. And we work with -- when there's sort of problematic behavior in the marketplace, we try to understand it and work with the issuers to make disclosure, additional disclosure that might be helpful for the markets to understand the situation and ultimately, where needed, we work with regulators as well. In particular, we also, in addition to monitoring ongoing disclosure that companies make, we work to qualify companies for our QX and QB marketplaces. So we review their qualifications, we conduct background checks. We make sure that they are meeting the standards that we've developed for the QX and the QB markets before we allow them to start trading there. And then once they are trading there, in addition to looking just for the ongoing disclosure, we're also looking to make sure that they continue to meet the requirements and that we identify any deficiencies that they may have and we -- when they fail to cure them, we remove them from those markets. We also -- one of the other sort of important jobs that I think our group does is we work to establish best practices and our disclosure guidelines and the minimum qualifications for each of our market tiers. This is an area that we're constantly working on, especially with regard to marketplace trends and opportunities to improve information availability for investors. Over the years, for example, we've walked up the requirement -- the financial criteria for OTCQX companies. We've required better disclosure of insiders from OTCQB companies. And another example is when we started seeing more companies relying on fundraising with convertible debt at a significant discount to the market price, we began requiring additional disclosure of those debt issuances for Pink companies. So these are the kind of things that we -- that our group is working on, looking at trends and looking at the data that is available to us to see how we can make sure that companies that are traded in our markets are providing the best information that they can to investors and then investors sort of have an idea when -- where to go to look for information and what the expectations are in the baseline, expectations are for each of those companies in our markets. Another type of information that we work on collecting in the Issuer Services department is just sort of key profile data for each company. We manage a process where, twice a year, we have companies go in and verify all of the profile data that we have for them, including just their business description and their offices and directors and their share data and their service providers that they use. So just basic sort of information that investors should have access to, to better understand what it is that a company -- what kind of business they're conducting and who they work with. We also work with a number of third-party providers to help provide additional types of information for companies. A number of news vendors, we incorporate their data. So an investor can see news along with financial disclosure and other types of information about issuers. We work with transfer agents to provide current share data for the companies so that an investor could see when the outstanding shares changes for a company and like more easily identify dilution. The other thing that we sort of -- that we focus on doing in our group is really more around surveillance activities. We are looking at not only to make sure that companies are putting disclosure out there, but we're looking at the types of other information companies are putting into the market. Stock promotion is a big one. We monitor stock promotion for all of the companies in our marketplace, and we have -- we'll put a flag on the company's profile if we see an ongoing promotion campaign that is either sort of -- they're a very heavily promoted stock or sometimes, it's just a promotion that is -- just has outrageous claims in it and really, it's just something that we need to alert investors to. We do occasionally have companies put out additional disclosure about their stock promotion campaigns. The surveillance team will also respond to regulatory requests when we have a request for information from regulators or occasionally to make referrals to regulators when we see activity in the marketplace that we think that bears the SEC or FINRA looking into. We also have one other tool sort of at our -- available to us that we use occasionally, we will identify a company with a skull and crossbones, and we call it Caveat Emptor. And this is used for companies that are...

The way I always think about it, companies that kind of represent maybe a public interest concern, right, where investors should just be aware that there may be something going on. At least from a legal perspective, that's what I've always looked at.

Yes. Thank you for filling in for me there, Dan. The public interest concern is a -- it's -- sometimes, it's information that we think is very important that is not being provided by a company or answers that we're not able to obtain or just activity that we think is just concerning enough that we think it requires another level of warning to investors. And that is a pretty good overview of the Issuer Services department.

I would agree. Thank you for that Lis. That was -- thank you from a legal perspective as well for all the compliance work that you and your team do. It's very much appreciated. I think the market appreciates it as well. Well, thank you, Lis. That was a great update and good insight into what you're doing in Issuer and Information Services. I, as the lawyer, am going to focus on the exciting world of OTC regulation. Specifically, I'm going to talk about some upcoming changes to what's called SEC Rule 15c2-11, which has a major impact on the way our market operates. But before I do that and to kind of set the stage, I'm going to spend just a minute talking about the regulatory posture of our trading systems. I think it adds to the discussion as we go. We operate 2 SEC-regulated alternative trading systems or ATSs. One is called OTC Link ATS and the other is OTC Link ECN. For the most part, the changes to Rule 15c2-11 and a lot of the regulation that I will focus on is really related to OTC Link ATS. And that's because of the way that system operates. OTC Link ATS is under the federal securities laws, what's known as an interdealer quotation system. And what that means is that brokers can use the system to publish, meaning publicize their interest in buying or selling a certain security. They can post a price and a number of shares that they like to buy or sell. And that information is available to their counterparts, other broker-dealers on the system as well as to investors. And then brokers use the system to communicate with one another and ultimately determine whether or not to execute a trade. That works in contrast to, say, how an exchange typically works or how some other trading systems work, which is an anonymous matching engine. And that's what OTC Link ECN is, where brokers send in an anonymous order and the system itself has an engine that matches those orders against each other. And if they do match off, that becomes a trade and each party has notified that they've executed the trade. The reason that OTC Link ATS is our primary system and the reason that it's so impacted by these rules is because of the way OTC securities typically trade. If you think about Apple or Google or Microsoft, there's no reason to source liquidity if you're a broker. There's such an immense trading interest from retail and other sectors that you don't have to go finding somebody to buy your shares or to sell shares, too. That's a natural -- naturally occurring event. With, let's say, a community bank, which is a good solid company, something like the 100-or-so community banks on our OTCQX market, there may not be that same natural pool of liquidity. And so if you're a broker-dealer representing either your own interest or that of your customer, you may want to access, let's say, a bank specialist broker-dealer, who may be able to find additional liquidity through their pool of customers and their contacts and, in that way, help support the trading of that bank. That's true for a lot of securities on our market, a lot of OTC securities generally, and that's why we're focusing here on OTC Link ATS. So I promised 15c2-11 and I will now deliver. Rule 15c2-11 has a huge impact on our market, and it's been around for about 50 years at this point. So not a new rule by any stretch. For the entirety of its existence, 15c2-11 has really governed whether and how a broker can publish a quote, in the way I explained for OTC Link ATS, in an OTC equity security. It's not about who can trade or whether something can trade, it's really about that public information, that public quote that a broker is making. The rule has also required since its inception,that before a broker can initially quote a security, so in other words, before a broker can publish a quote in a security that's never been quoted before, it needs to ensure that certain publicly available information about that security exists. And it needs to affirm to FINRA, which is the broker-dealer regulator, that it has that information and allow FINRA to engage in a little back and forth and ask some questions. And that's done by what's file -- what's called filing of Form 211 with FINRA. Once FINRA signs off, that the company or the security is appropriate to be quoted, the broker-dealer can then publish a quote in a system like ours. So this impacts every security, more than 11,000 securities have gone through some degree of 15c2-11 review or compliance before being quoted with us. Now once the security starts being quoted, a broker that filed that 211, or if there are multiple brokers that all of those brokers that actually filed that form, have 30 days from approval where they are the only ones or that broker is the only one who can quote the security. As long as the quote -- as long as the broker is making that continuous quote without a break of 4 days or more, then at the end of that 30-day period, all the other brokers can jump in and start quoting and really create a deeper pool of liquidity and price discovery. And that's what's called piggyback eligibility. And it stems from those other brokers piggybacking off of the work of the initial filer. And the theory has been that as long as investors have access to that pricing information, that continuous quote, that can stand in the place of continued issuer disclosure. So over time, those quotes can exist in perpetuity. As long as there is a continuous quote, even well after the 30 days, this can go out for years and years, a security can continue to be the subject of public broker-dealer quotes, even if the company ceases making information available. And so you heard Lis talk about the different tiers we have, our OTCQX and OTCQB markets, and then the designations within Pink, current information, limited information and no information. The reason that Pink no-information companies exist is because 15c2-11 allows for that, because they can continue to be quoted whether or not they make information available. Well, after a lot of discussion and a lot of thought recently, and this was last September, but that's very recent in regulatory circles, the SEC published final amendments to this rule. Those amendments will go into effect on September 28 of this year when we have a compliance date. Really, what the changes do is have 2 major impacts on the way our market operates. The first is that those companies, those no information companies and certain others that won't qualify under the rule, will no longer be publicly quoted on our markets. They will cease to comply with 15c2-11 and they can't be the subject of public broker-dealer quotes. The other major change is that instead of having this intervening intermediary, having FINRA opine as to whether a broker can start quoting a security, we, OTC Markets, will stand in that place. And once we do a review and we make a publicly available determination that the company has the appropriate information to comply with 15c2-11, all brokers can rely on our determination. And that means significant efficiency in the market. That means companies can start -- or excuse me, brokers can start quoting without waiting that 30 days as long as they're relying on our determination. And it means that over time, we have the ability to continue qualifying the company and doing an ongoing review so that we're always informing the market, whether there's current information available. And that ability stems from a lot of the work that Lis described that she and her team do, where the SEC came in and really spent some time understanding our processes, understanding that we have systems in place for reviewing issuer disclosure. And therefore, under this new rule, we qualify as what's known as a qualified IDQS. And that gives us this kind of unique position for the moment, where we can provide these kinds of publicly available determinations and really allow the rest of the industry to rely on us. All of that, however, begs one final question, which is what happens to those companies that are no longer going to be the subject of a public broker-dealer quote. And this is where we have proposed and again, worked on very closely with the SEC, the concept of an expert market. The expert market would give effect to investor protection on a couple of different levels. If you look at why the SEC proposed these changes to Rule 15c2-11 in the first place, their stated reason was that when retail investors, the general public, has access to continuous quotes in the securities of companies that aren't making current information available, they may be more susceptible to fraud. So without company-based information out there, they may be more susceptible to other fraudulent information and when they see real-time quote updates and when they see an active market in that way, they may believe that this is a security they should be involved in. So what the expert market does is provide an electronic marketplace for brokers to continue to communicate with one another and publish quotes, so that they can ensure their customers get best execution. If you don't have an electronic market in place, if these, let's say, no-information companies were just to be removed from our system full stop, it would go to what we call the gray market, where brokers would call one another or have one-on-one communication to try to effect trades but without the ability to really know whether they're getting the best price at any given time and without the ability to really show their customers that they have gotten best execution, they have gotten the best possible trade for their customer. It also prevents regulators from seeing whether brokers have fulfilled that obligation. So the expert market would allow that electronic market to exist, but would restrict the distribution of quotes so that retail investors wouldn't see them, and they would only be available to what's called under the proposal, qualified experts, which are institutions, brokers and accredited investors. That's a group that's a little bit more risk tolerant, understands that they may be investing in securities that don't otherwise make current information available and may be able to operate in that market without the same kind of susceptibility to fraud that a typical retail investor might. And so again, it protects the retail investors on one end, and it protects all other investors because it allows for that kind of price discovery and best execution determination. The expert market itself was a proposal that we made. The SEC published it on their own towards the end of 2020. There was a comment period. All the comments so far have been strongly in favor and we are hoping that the commission acts soon. We look forward to implementing not only the expert market but all of the changes needed to fully bake in the new amended Rule 15c2-11 and allow for the entire industry to adjust. We will provide more information about what we hear from the SEC and our industry partners as soon as that becomes available. Thank you all for bearing with me and listening to the regulatory update, and looking forward to answering questions at the end.

Hi. My name is Matt Fuchs. I'm the EVP for Market Data, OTC Markets Group. And I'm going to give you a quick overview of the Market Data business, talk about some of the trends we're seeing as well as some of the opportunities going forward. So let's get started. So here is a kind of a quick snapshot of the Market Data business from a revenue perspective over the past 10 years. As you can see, the business has been growing pretty consistently. A lot of this is really due to the unique data set that we have as well as some new products that we've launched over the past few years as well as the growth in the market overall. And in the right-hand corner here, I kind of break down the revenue by business line. And one of the interesting things, and you may hear some of my colleagues talk about this as well, is kind of the virtuous cycle that exists between our business lines. So the pie is pretty evenly split and the way it kind of works is success at the Corporate Services level helps Market Data, same thing with the Trading Services as well as progress that we make on the Market Data side will help influence and drive the businesses of Corporate Services and OTC Link. So it's a virtuous cycle, and it's kind of a good trend that we've had going pretty much for the past 10 years. So I'm going to move on now and kind of talk about Market Data's main product lines and how they kind of fit into our revenue makeup. So we have 3 main product lines, real-time data, reference data products and our compliance data. So the real-time data products on the core product line for Market Data, and this is the data feeds that are consumed by participants on our marketplace as well as the main market data distributors like Bloomberg, Refinitiv and now, ICE. So real-time data products make up kind of the core of the Market Data offering because it really powers the continued quoting and trading on our marketplace and also helps us grow the reach, more investors, more retail investors, more institutional investors. So you can see here some of the key stats around this for 2020. We had a pretty fantastic growth in 2020. Our pro users up 17% and non-pro users up 35%, and that's a lot. It's attributable to the growth in the retail trading in 2020, a lot of it from the pandemic and differing change in behavior of a lot of retail investors. As well, we've had significant growth in our BD enterprise licensing. And what that is, is really -- that goes out to -- that's mainly consumed by online brokerages, which is, again, feeds into the retail story. So we've seen a lot more interest from the online brokerages. And that's -- again, that's a trend that's been happening over the past 5 years as well. So you can see some of the statistics here. Number of distributors, our data gets out on all the main financial portals. We've had continued growth internationally, Europe, Canada, Asia, and that's really helping our business here on the real-time side pretty significantly. Next, I'll talk about the reference data products. And when we say reference data products, this is really around providing end-of-day pricing information as well as security and company reference data. So this is non-real-time. And a lot of this is used by large custodian banks as well as wealth management firms to track valuation as well as feed their internal systems around security masters, company masters, stuff like that. So this business line has been a lot more stable and kind of grows linearly with the marketplace. So as we see more activity on the marketplace, we see more issuers and securities on the marketplace. This business line will grow in step with that. And that's kind of what we've seen and it kind of goes back to my point around the 3 different business lines feeding into each other. All right. So I'm going to move on here. So our next product line is our compliance and analytics product line. And this is -- this line is basically kind of the new product area for us. We launched some of these original compliance products about 5 years ago, and we've been adding to them over the past 5 years. So what we've built here are analytics suites that help compliance departments automate their processes around OTC equities and now small cap listed equities. So what this really does is has 2 effects. One, it helps them cut costs as well as better monitor the OTC marketplace. And as well, it also helps these firms basically be able to quickly differentiate between the wide breadth of securities we have in our marketplace, right? So they can quickly discern the super large cap multinationals versus some of the nano cap securities, right? So this helps compliance groups get more comfortable with the OTC marketplace. And then that, in turn, helps us get our data in front of more institutional and retail investors. So we've seen, again, very consistent strong growth in this area. Our compliance data customers are now at 45. This has been a growing area for us over the past 5 years. And we believe that it's going to continue over the next couple of years as well as we kind of branch out. What we've started to branch out into is around tangential areas. So we started around OTC equities and now we're building around small cap equities as well, and we built a whole new browser-based application called Canari, which helps, again, these compliance groups track OTC and small cap listed securities. So this has been a big growth area for us and also where we're adding new products. So one of the -- 2 of the new products that we have in 2020, we launched our Blue Sky Data Product. And Blue Sky Data, what the product does is basically provide information to, again, these compliance groups around Blue Sky exemptions, which are state securities law exemptions for OTC securities. So OTC securities don't get a blanket exemption like listed securities do for the state Blue Sky laws. So this data helps them monitor that information and will help them with their regional, with their FAs and RIAs to be able to allow them to talk about right research on OTC equity. So it's very important, both from a larger corporate level to get this data out as well as from a Market Data-specific level. And Qaravan is a bank data analytics platform, which we've been continuing to build on and offering that data out on our public website as well as in Canari. And that's around the U.S. bank -- U.S. community bank sector, which is important for us. We have about 550 community banks in the marketplace. So this is another new product that we've been -- that we're continuing to add to and something that we're going to try to drive sales over the next year or so. So those are the 3 main product lines for Market Data. And again, as I mentioned, with the business lines, our product lines, again, they kind of work with each other. They really help. If you're a real-time data customer, it really helps you to have as well the compliance data. If you want to be in the OTC equity marketplace as a participant or as an investor, it helps. You need this information to help make the best decision. So it's something that we see. And again, it's kind of a virtuous cycle that's been created. So the last couple of points I'm going to make is around trends we're seeing, our strategy and the opportunity over the next year or so. So the trends, this is not a surprise to anybody. We've seen significant volume increases in 2020 versus '19. You can see here on the right. But for the market in general, it's more of a long-term story. We've seen continued activity on the marketplace. And this has been going back about 10 years now. So that continued growth, and that really talks to, again, what Corporate Services has been doing, bringing on more quality and transparency to the market, new investable assets, alternative assets around the crypto market or, like I said, the foreign multinationals. So this is what's really driving the activity and driving the dollar volume. But again, in 2020, it was significant, and we're seeing that again in the first quarter of 2021. So that's definitely something that is, for sure, we think going to sustain for the rest of the year. Global visibility, again, I mentioned previously around the multinationals and what we've been doing to get more foreign securities onto the marketplace. That's really helped as well on the Market Data business. We're seeing interest from Canada, Asia, Europe. The amount of international securities as a percentage of our overall activity is significant, usually about north of 70%. So that type of activity is really driving visibility of our marketplace and it's helping drive Market Data as well. From a strategy perspective, what we really try to do is, first and foremost, develop our product set around our core market, which is OTC equities, and build out data that really surrounds that core market as best as we can. And that really kind of goes to what we've done around Blue Sky data, what we've done around the compliance analytics, Canari, Qaravan. These are all core parts of the OTC marketplace. So that is kind of the first component of it. And then as we do that, we want to expand that product set to these tangential areas, where we have expertise and we can bring value. So the small cap U.S. equity marketplace is one good example of that, because the securities that trade on that marketplace are very similar to many of the securities that trade in the OTC equity space. So we're bringing what we're doing in the OTC equity space to that space. We understand -- and we understand the players, the issuers, all of the data that surrounds that marketplace, and that's where we believe we bring some value. And then third, we want to broaden our sales reach outside of the core U.S. broker-dealers to more of the wealth management space in the U.S. and as well as to distributors and financial portals outside of the U.S. So what we've been able to do in the U.S. is we have a core of market participants, many of the large bulge bracket banks. They're all our customers. They're all very aware of what we do. We want to expand that out to the wealth management groups, regional wealth management groups, RIA groups to help them understand our marketplace, as well as in internationally, do the same type of concept, right, where we've expanded significantly into Canada. We're seeing a lot of interest from Europe as well as Asia. So that is kind of from a sales perspective, where we see growth is going to happen and where we're going to target our efforts. Opportunities in the short term is really around, one, we're going to leverage what's going on in terms of market activity and the investor interest that we're seeing. That's just -- we -- there's been a massive amount of retail involvement. We're seeing a lot more interest again from online brokerages from the wealth management groups. So we're going to leverage that and push as much as we can on that. Another interesting component in the short term is there's significant changes to Rule 15c2-11, which I'm sure Dan is going to go into in his presentation pretty significantly. But what it does for market data is, we believe, be able to provide the opportunity to bring on more foreign securities onto the marketplace. And that will again kind of spin the wheel in terms of reaching additional institutional investors, reaching additional retail investors which will, again, drive interest in our market data. So that's coming later in the year, and that's something that we think is going to be pretty significant. And the third is really -- is to drive sales around our existing customer base, which we've built up over the past 5 years and push kind of the new products into that customer base, because we think that, like I said, there's a lot of value. We really understand this space, and we can really help our customers increase automation, cut costs, as well as introduce them to the OTC market. So that is what I see at a high level for the market data business. I think there is a lot of opportunity. 2020 was a good year. I think 2021 is going to be a better year. And thank you, and I look forward to answering your questions after the presentation.

Hi, I'm Mike Modeski, President of OTC Link here at OTC Markets. OTC Link is responsible for operating 2 ATSs in the over-the-counter market space. Our primary ATS, OTC Link ATS, trades 11,000-plus securities on the over-the-counter market. OTC Link ATS is a network model that offers the ability for our subscribers to post quotes and also trade messages between one another to affect transact actions in over-the-counter securities. In the last few years, we introduced OTC Link ECN, a fully automated matching engine ECN in the over-the-counter market. OTC Link ECN offers anonymity and direct order entry into the over-the-counter market. In the next few months, we'll also be adding a third ATS to our suite of products, OTC Link NQB IDQS. The need for OTC Link NQB IDQS will allow our ECN, OTC Link ECN, quoting with market participant ID, OTCX, to be able to distribute its depth of book out to our subscriber base. Over the last 6 months, OTC Link ECN and OTC Link ATS have seen tremendous growth in transactions, while the entire market overall has grown in transactional count. Here at OTC Link, we focus on the needs of our subscribers and want to give them the tools they need to trade in the over-the-counter market. Whether a wholesaler wants to trade with their own [ MPID ] in our fully attributable ATS model or a subscriber wants the anonymity offered by OTC Link ECN, we have a tool for them to use. As we continue to grow our tools and solutions for our subscriber base to use on a daily basis, we focus also on reliability and maintaining 100% uptime in the over-the-counter market. Over the OTC markets, Link ATS still remains the primary marketplace for trading OTC securities.

Hi, my name is Bruce Ostrover, Chief Technology Officer at OTC Markets. And today, I would like to talk about both the technology team and our technology priorities. Our technology organization. The first team to talk about is our trading team, which is comprised of core development and core QA. And the word core translates to our ATS and our ECN offerings. Both of these teams collectively ensure that development, QA and production releases of these products are successful 100% of the time. Our next team to review is our web-facing client team. And that team is comprised of, again, a number of development partners and our QA team. Together, they ensure that our OTCMarkets.com website and our OTC IQ product are completely deployed successfully and without problems, 100% of the time. In addition, they are responsible for internal applications that we use to both monitor and provide performance enhancements to our ATS and our ECN products. It's important to note that at OTC Markets, we have a very low ratio of developers to QA staff. And we keep it very close to provide an agile working environment, which means if we need to roll out a patch within the hour or 2, we have the ability to do that or to create a longer development cycle of 2 to 3 weeks to add additional functionality into any of our products, which include both our core trading platform and our web initiatives. Our top technology initiatives, our resiliency and high availability, both of these are at the top of the list and are paramount to our success here at OTC Markets. Resiliency ensures that our systems are up and running 100% of the time, and I'm happy to report that it's been like that for a while. High availability is another important product that we offer or parts of the product that we offer, that allow us to use redundant components to continue to provide a high level of operational excellence. How do we operate? We are a fintech company and by that, the underpinnings of all our offerings are based on technology, which is obviously an incredible driving force throughout our product line. We are very cost conscious. We do not spend shareholder money where it is not necessary. And lastly, as you've heard in the last number of years in the technology world, our cloud offering is very much based on how we can evaluate our cloud behavior and our offerings and what we gain by moving our products to the cloud. Some are moved into the cloud and some reside in our data centers. Hope you have a great day. This was Bruce Ostrover, Chief Technology Officer.

Hello. My name is Antonia Georgieva, and I'm the Chief Financial Officer of OTC Markets. Thank you all for joining us today for this exciting review and discussion of our business. My colleagues provided a great overview of our markets as well as our products and services. I would like to focus now on how we monetize our client relationships and the value we create for issuers, our broker-dealer subscribers and the investors who participate in our markets into revenue and ultimately, shareholder returns. We generate a majority of our revenues through a subscription model. In fact, over 80% of our revenues are recurring in nature. For example, once the broker-dealer decides to trade using OTC Link ATS, that broker-dealer typically continues to subscribe to our services until it stops being active in trading securities on our market. We also generate transactional revenue, which provide us with some gearing to the volume of trading activity. As volumes fluctuate, our revenue mix will also vary, though we expect to maintain a significant majority of our revenue from subscription sources. As Mike outlined, OTC Link LLC represents our Trading Services business and operates our trading venues, OTC Link ATS and OTC Link ECN. Our broker-dealer subscribers pay monthly subscription and connectivity fees to use OTC Link ATS. They connect to OTC Link ATS through our OTC dealer application and pay fees based on the number of authorized users per subscriber. As Matt discussed, we provide our subscribers with access to the extensive market data, compliance data, company data and security information that we collect through our OTC Link and Corporate Services business lines, for which our subscribers pay us monthly license fees to access the information. Our Market Data licenses are priced at either per enterprise or per subscriber rates and are delivered through direct connectivity, extranet connectivity, third-party market data distributors and OMS providers. We generate a majority of our Market Data Licensing revenue from sales through Market Data redistributors. And we share with those redistributors a portion of our Market Data Licensing revenue. Jason and Kristie discussed our OTCQX Best Market, the OTCQB Venture Market and the suite of services we provide to the companies trading on all of our markets. Companies that choose to have their securities designated as OTCQX securities do so annually on a calendar year basis and pay a onetime application fee and an annual fee. Companies on the OTCQB market renew their services annually or semiannually on the anniversary of the date on which they joined our market and also pay a onetime application fee as well as an annual or semiannual fee. These fees are fixed. They do not vary based on outstanding shares, market cap, market segment or otherwise. Companies on both markets also receive access to a suite of other services. Companies on our Pink market may subscribe separately to these services and pay fees on an annual or semiannual basis. Our transactional revenues are mostly related to OTC Link ECN. It generates transactional revenue based on share volume that is executed on the ECN matching platform. Our broker-dealer subscribers pay a fixed fee per share to remove posted liquidity on the ECN and receive a rebate for posting their own liquidity. Certain of our OTC Link ATS revenue is also transactional in the form of usage fees, which broker-dealers pay to publish quotes and communicate and negotiate with other counterparties on OTC Link ATS. These fees include per security position fees and message fees, determined daily and payable monthly. Separately, and to a much lesser extent, we generate certain transactional revenues in our Market Data Licensing and in our Corporate Services businesses. Ultimately, the value we create for our clients translates into shareholder returns. Thanks to our subscription-based revenue and the upside we generate by our transactional businesses, we've been able to achieve profitable top line growth, generate strong free cash flows and distribute consistent shareholder returns through our growing regular dividends, special dividend and our share buyback program. I would like to conclude by thanking you once again for joining us today and inviting you to join us now for our questions-and-answer session.

Hi, everyone. Thanks so much for watching our presentations. We'd like to just kick it off by responding to a few of the questions that you guys have asked us throughout today. So I'm going to direct the question for each of our team members here. Jason, I'm going to start with you. You gave a great overview on OTCX and QB businesses and the value it provides. But I'd like to talk a little bit more -- this is about the trends that we saw in 2020 and into 2021. And what types of companies and sectors we were seeing really reflects that growth?

Thanks, Kristie. Sure. As we reported in our financials, 2020 started off a little slow, right? The pandemic saw kind of corporate issuers kind of take a pause to see what was going on in the world. And so while we started slow, the sales team, the Corporate Services team continue to build pipeline and reach out to issuers and have those discussions about our markets. And what we saw on the latter half of the year was a significant rebound in terms of number of companies joining both our OTCQX and QB markets. The fourth quarter actually saw record revenue and number of companies joining. As we look into 2021, that trend is continuing. The number of companies that are joining our markets, the number of applications we're receiving from companies, continues to grow and probably close to all-time highs in both of those. And those are really coming from all over, right? We're seeing significant growth again in the U.S. community bank space, right? There was a pause last year as banks were dealing with the PPP programs and some of the other issues from the pandemic. But we're also seeing tremendous growth from outside the United States, Europe, primarily, as well as Australia and our core non-U.S. market of Canada. And those are coming from multiple types of industries. Certainly, resources mining, mineral, oil and gas have been on the upswing. So we've seen a lot of that. But also from e-sports and gaming, another significant industry that we're starting to get traction, technology, biotech, blockchain and crypto. All of these industries, as Matt pointed out in his presentation, are really driving our growth kind of into this year.

That's great. Switching gears for a second. Dan, I know you gave a really great overview of all the changes that are happening in our market based on 15c2-11. But we did get a question around what are some of the other regulatory recognitions and some of the other regulatory initiatives that we're pursuing, specifically to OTC Markets Group?

Sure. It depends on how much time we have, I can do this all day. We have a number of other things that we have traditionally been pursuing. I think Jason and Matt both referenced our work with Blue Sky and working with the individual states and the fact that we're now up to 37 states that recognize OTCQX. That's a nice accomplishment, but it's not all the way there. It's an ongoing effort. And so this year, I think, presented its own set of challenges in terms of engaging states on that issue, but that is something we plan to continue pushing for. The other 2 kind of profile issues that we've been working on for some time, we were fully involved in the passage or the introduction last year of the ESOP Fairness Act, which is legislation that would allow more or less OTCQX companies or those that would qualify for OTCQX, to offer any stock ownership plan that would operate in step with how a New York Stock Exchange or NASDAQ ESOP program would operate. And that's really just the correction of outdated rules in the tax code, need to be modernized given really everything we've talked about today about how our market operates and what kind of electronic market we've developed. The other sort of legislative and regulatory push that we've been making over the last maybe year or 2 is around margin eligibility. Again, that's for companies largely on OTCQX. There may be some OTCQB that would qualify under those standards as well. And that's a push we're making both with legislators and with the Fed. And again, it's a modernization of a pretty outdated set of rules in what's called Regulation T that the Fed monitors, that really have not grown up and looked at the OTC market as it exists. They sort of are publishing a list of companies that would qualify for margin that were OTC based on certain criteria back in 2007, when NASDAQ came in exchange since we have filled that role and really modernized what that market was. Even from there, we're getting a lot of interest in folks, both on Capitol Hill and inside the Fed, in working on that and seeing that modernize. I'll cut it there. But certainly, that's the tip of the iceberg in terms of the things that we're focused on.

But I think great to see and be able to talk about the progress we continue to make on a regulatory front towards some of these initiatives. So thanks for sharing that, Dan. Cromwell, I'm going to turn it over to you next. We've gotten a question just around some of the longer-term trends that you see as impacting the business over the next 12 to 24 months. And I think IPOs and SPACs and things like that also affect that future pipeline as a secondary part of that question.

So I mean, as I look at the -- two years is not a long-term trend in the building out a platform business. I mean we look at most of our business lines take 5 years to go from first launch to building out a sustainable revenue model that in the middle is connected with a customer need. And -- but -- so as I think about the trends, the short-term trend is, of course, 211, which is very important because that's allowing us to onboard new clients and to be recognized as the organizer and monitor of ongoing disclosure. So -- but that's into a bigger framework, which is our platform has developed. So we really provide a full suite of tools for a company to be public in a much more modern manner than used to be available is -- and if you look at the traditional stock exchanges, they're fantastic institutions with great histories. But from a technology perspective, your experience is a lot like buying software from IBM 20 years ago. It's expensive, it's complex, and it comes with a lot of different consultants. Our approach to being public is the same approach you've been seeing in the technology space with the development of open source cloud services, Software-as-a-Service, and allows companies to assemble the tools they need to be public in the most efficient manner for that. What's your reporting standard? Where are you located? What are your needs? How established is your business? Is -- and we've been building out both the platform but also the operational recognitions and regulations. And I think that trend is really going to open up being public. On SPACs, I see SPACs as a tool, which is a development to take companies public more quickly. And it has a management -- it has -- management is assisted by a SPAC sponsor who knows the process of going public. So they're skill to bringing companies across to the public market is -- but it's one tool. Direct listings, another tool. Our market, we've seen direct listings forever with community banks. We've seen direct listings with innovators such as GBTC. So I see our platform opening up being public over the longer-term trend. And then on the second side is we've got a platform for broker-dealers. The OTC market was very dealer centric. Our network model was the key one. We're much more open to different types of tools for broker-dealers. And our goal is to build whatever services and data broker-dealers need to achieve best execution and regulatory compliance. And that -- those pieces, as we add them in, will be more useful to broker-dealers because we're much more collaborative with the broker-dealer community. We view ourselves as a vendor. We're very cost conscious of creating a competitive platform to help them do more business on their own platforms or do their existing business at lower cost. So those are the big trends, which I see us helping facilitate and grow, but none of them are easy to execute. The execution, the hard work, the building the business over the long term using our data and technology-driven viewpoint.

And Cromwell, I know you just brought up and talked a little bit about the services that we continue to build-out for the broker-dealer community. So Mike, maybe that's a nice transition for you just to expand a little bit on the launch of the OTC Link NQB and sort of what that means from a broader business perspective for us.

Sure. OTC Markets traditionally had a fully attributable IDQS that's driven by quotes and messages across the platform. And then once we released OTCX, our ECN product into the marketplace, a number of broker-dealers, subscribers moved towards the desire to have trading take place on a venue that was just sending orders for execution, and they enjoyed the anonymity of the platform. One of the things we tried to overcome was an ability for OTCX to have a depth-of-book feed to be able to send that out to our broker-dealer community. And based on 15c2-11 from years ago, one of the things we need to do is put OTCX's quotes into an interdealer quotation system. So -- NQB IDQS will give us the best of both worlds. It will have an IDQS that's coupled with a matching engine and attribution, so we'll be able to put all of the orders that exist in OTCX into NQB IDQS so that we will be able to accomplish what we set out to do and have a depth-of-book feed for our OTCX, ECN and also a home for other subscribers that would like to trade on a fully attributable matching engine platform to be able to put their layered orders into that system as well.

That's really helpful. Thanks, Mike. And Matt, maybe over to you because I know that part of what Mike just talked about will affect the Market Data business. But maybe if you can just kind of elaborate on that and some of the other opportunities that you're seeing.

Right. So Mike spoke about the NQB data feed, which is going to be super helpful for us in the short term. That's an opportunity that we're going to have right away to use from a revenue perspective. Also, going forward, other opportunities are kind of things that I highlighted in my presentation, which is really around the small cap listed space as well as internationally. So we see a lot of opportunity there. Again, it's a domain we understand. And then looking out forward, additional data sets that will be tangential to the OTC space, again, a small cap listed, there's private securities, there's data around banks. So there's a lot of interesting opportunities that are available.

That's great. And maybe, Antonia, just to kind of expand and sort of round out a lot of the way that we've talked about some of the opportunities. Can you just share a little bit from your perspective on kind of how you see our overall revenue mix evolving over time?

Certainly, Kristie. We have been and will continue to be predominantly a subscription-based model. As we discussed, we have seen a significant uptick in our transactional base revenue coming out of our ECN. That component is largely unpredictable for us as it is driven by market -- general market activity, and it will introduce some fluctuations in our mix as well as in our overall transaction-based revenue, but we do not expect the mix to change dramatically. Even as we introduce the new ECN NQB component of our business, which Mike outlined and Matt added to, we expect that line of business to also bring a mix of subscription and transactional revenue and largely sustain what we have experienced in the past. But again, in terms of expectations and for investors, looking at our financials, they should expect some fluctuations around our mix over time as the balance of transactional and subscription-based revenue varies. But at the same time, I would say the majority of revenue will continue to be subscription-based.

And just as a follow-up question to that, Antonia, we did have one of our viewers just ask kind of how we think about our overall cash balance and how we see that sort of changing over time. And maybe, Antonia, you want to start? And then if, Cromwell, you want to chime in as well, that would be great.

Certainly. We evaluate our capital needs as part of our budgeting process as well as on an ongoing basis as we evaluate the changing circumstances in our marketplace as well as our opportunity set. And historically, we have deployed our capital, first and foremost, to support organic business initiatives. Occasionally, we have also engaged in select M&A activities as the use of our capital generation. But most importantly, we have focused on supporting our strong shareholder returns through our regular dividend, our special dividend and our buyback program. We do not expect substantial changes in our deployment of capital. And we'll continue to evaluate the use of the cash that our business is generating along the same lines going forward.

And this is -- the one point I would throw in is the reason we have an ongoing dividend, which we want to have to provide recurring revenue income to our shareholders and a special dividend is it gives us flexibility if we were to find an attractive acquisition, we would have some cash. Now we haven't found an attractive major acquisition. And over time, we've been mainly an organic growth story. That said, we are open to acquisition-driven or organic internal investment. And one, financial discipline is very important. We run our balance sheet carefully and conservatively. And that's our goal, to keep having enough financing to be able to invest in the business while provide returns to our investors who are our ultimate owners.

Thanks, both of you for that. Jason, we did get a follow-up question to the session that we did earlier, just around cross -- the cross-listing process, talking a little bit about QFEs and how that kind of translates onto our market and really helping companies to access that global retail investors. So maybe if you can just expand upon the discussion from earlier a little bit.

Sure. So we primarily -- and part of the growth we're seeing is actually international companies kind of looking to access the U.S. retail investor. There's lots been made that retail investing is back. Certainly, through the pandemic, we've seen the increased importance in retail investors and issuers looking to access those investors. So part of the growth in the fourth quarter last year and into this year that I've mentioned, is international companies now recognizing the importance of that investor base and trying to attract them. Part of that clearly is to have a security that trades in the U.S., in U.S. market hours, in dollars that's easily accessible through the broad retail trading platforms, E*TRADE, Schwab, et cetera. So where retail investors can buy those securities on their phone or wherever they do their investment, have access to that and be able to have the information to do their investment research, right? That's the basic premise of what we're providing international issuers is transporting all of that into the U.S. to access the U.S. investor. When it comes to accessing global retail investors, non-U.S., a little bit different there. The U.S. still represents the most sizable portion of kind of investment in the world and the U.S. retail investor is really kind of that 800-pound gorilla that everybody is looking to attract. When you start looking outside the U.S. for retail, it really is country-specific, fits and starts. There are some countries that have a bigger kind of history of retail investing than others that are more open to retail investing. If U.S. corporate issuers are looking to access that in other countries around the world, not really what we provide, but certainly, the mechanism to attempt to do that would be a cross-listing the other way. Although I would say that there are significant number of countries around the world that give their investors access into U.S. markets. So it's something, I think, as a corporate issuer, you would have to think about and kind of really look at the markets or the pockets of non-U.S. retail investment that you'd be trying to go after and see what the best outcome would be.

And I'd add into that a really important point about when the word retail investors is used sometimes positively, sometimes negatively. And is -- but for a big part of being public ties into ESG, governance, social connections with our key stakeholders. And the best public companies use being public to connect with their key stakeholders, their community and whether it's ownership by consumers, transparency into their community or good governance and the transparency of that good governance. These are some really key points of being public. And we're an organizer of markets, but companies need to take ownership of their public market. And our platform provides that. And I don't see with the trends in ESG and the trends in regulatory compliance and the trends in governance and good corporate housekeeping that being public is something that companies will want to shy away from if they want to be successful in a future that's much more transparent and connected.

And I think that it's a really good segue to one of our other questions, which Lis, I'm going to actually throw your way. Cromwell just spoke about as did a number of you guys, just about providing disclosure and the way that, that works and becomes available to whether it's our subscribers or investors that are logging into our website. So I think maybe we can just spend a couple of minutes just talking a little bit about the disclosure that we do make available and kind of how that shows up. So companies and investors know where to look for that information.

Sure. The most important aspect is the disclosure that companies make is publicly available. It needs to be out there and easily accessible for investors. So any investor can go on our website, OTCMarkets.com and type in a symbol or a company name and have access to all of the same disclosure that my team has access to when we're making the determination of whether the company is providing current information or not. So if there are any financial reports that they've disclosed, any of the key -- their key profile data, who their officers and directors are, what their share structure is, all of that information is available on our website. We link to companies' SEC filings and bank filings as well. The international companies that are traded on our QX and QB markets also have all of their financial disclosure available in English for investors on our website. So the goal is to make the information as concise and as easily available for investors as possible.

And that goes forward with our platform analogy. When we want to store data in a cloud web service provider, they give us multiple choices of databases and data stores. We give companies multiple choices of disclosure that works for their current operational practices and their management knowledge. An international company listed on a leading foreign stock exchange, they need to make their disclosure available in English to be compliant with SEC Rule 12g3-2(b). But the underlying accounting financial reporting is using the standards that their management team knows best, so they're able to provide the clearest disclosure under that model. We fit that into our market and we do it for banks. We do it for SEC reporting companies. We do it for companies that aren't required to be SEC reporting but have audited financials. And our goal is to give companies choices on how to provide the best and clearest information to investors and to give brokers choices on what's the best way to efficiently execute a trade and to fit that into our highly regulated industry, in a manner that's transparent and open to see. And I think that's the platform piece that we've been assembling and today is coming together and will be a real game changer in the decades to come.

Well, Cromwell, that was very well said. I think that's a great place for us to wrap and to thank all of you for being on this Q&A session with us today, but also to thank all of the investors and companies that joined in to hear our presentations. So with that, I'd like to thank you all and conclude the event. Thanks so much.