Interdealer Quotation System (IQS)

What Is an Interdealer Quotation System (IQS)?

An interdealer quotation system (IQS) is an electronic system for coordinating and spreading price quotes by brokers and dealer firms. IQSs are planned to give investors opportune and important market data on which to base their investment choices.

In the United States, the National Association of Securities Dealers Automatic Quotation (Nasdaq), Nasdaq SmallCap Market, and the Over-The-Counter Bulletin Board (OTCBB) exchange platforms are integrated into one IQS. By utilizing this integrated system, investors approach many securities, going from large blue-chip companies to smaller micro-caps.

Grasping an Interdealer Quotation System (IQS)

An IQS capabilities by integrating the price quotations of different exchanges into one platform. This permits investors to all the more effectively access security price quotations that would otherwise should be checked on several separate exchanges. In that capacity, the creation of an IQS advances the liquidity and accessibility of financial markets.

The specific specifications of an IQS will rely upon the specific focal point of its constituent exchanges. For instance, the OTCBB shows quotes, last sale price, and volume data for some over-the-counter (OTC) securities that are not otherwise listed on national securities exchanges like the New York Stock Exchange (NYSE). The securities listed on the OTCBB incorporate domestic and foreign companies, as well as American depository receipts (ADRs). The OTCBB, and other OTC exchanges, are at times alluded to as "pink sheets."

Another way that an IQS can benefit investors is by empowering a higher level of regulatory oversight. For example, the OTCBB requires broker-dealers to qualify as market makers under the rules of the Financial Industry Regulatory Authority (FINRA) before having the option to quote securities on the OTCBB. Likewise, companies who must have their securities quoted on the OTCBB must get sponsorship from a market maker and file standard financial reports with regulators, like the Securities and Exchange Commission (SEC).

Instances of Interdealer Quotation Systems (IQSs)

Another illustration of an IQS is OTC Link, which gives quotations zeroed in on small and thinly traded securities. The securities traded through OTC Link have no qualification requirements and frequently don't give convenient financial divulgences to regulators.

At the flip side of the range is the Nasdaq, which is home to over 3,000 technology companies. The companies that trade on the Nasdaq exchange are generally large and laid out organizations, and now and again are among the largest companies in the world.

Instances of unmistakable Nasdaq-listed companies incorporate Amazon, Google, and Microsoft. Dissimilar to their OTC counterparts, these securities are exceptionally liquid and routinely file financial statements and other data with the SEC.

Features

• Interdealer quotation systems (IQS) demonstrate price data and work with electronic trading in securities.
• There are a number of various types of IQSs and each has its own specializations.
• An IQS works by interfacing price quotations from several exchanges into one platform, in order to further develop usefulness for market participants.
• In the United States, famous models incorporate Nasdaq, Nasdaq's SmallCap Market, and OTCBB platforms.