Over-the-counter (OTC) stocks are US instruments that are not listed on a major US exchange, like NASDAQ or the New York Stock Exchange. OTC stocks are traded directly between two parties in a decentralized market.
OTC stocks are usually smaller companies that cannot meet the traditional exchanges' listing requirements, don't want to pay listing fees or be subject to reporting requirements. Generally, buying or selling OTC stocks is no different from buying or selling NASDAQ/NYSE-listed stocks. In some cases, orders with OTC stocks might have slower execution due to low liquidity.
Are OTC stocks allowed in an ISA?
Most OTC stocks we offer meet HMRC's eligibility criteria and are allowed in an ISA. See all ISA eligible stocks here.
What happens if a stock is moved from an exchange to OTC?
In most cases, nothing changes. The stock would still stay tradeable.