Dan Zinn - General Counsel Cromwell Coulson - President and Chief Executive Officer Bea Ordonez - Chief Financial Officer John Byers - Corporate Controller

Chris McGinnis - Sidoti and Company Jonas Champion - Net Income LLC Andrew Mitchell - Edison

Thank you, Operator. Good morning and welcome to the OTC Markets Group third quarter 2016 Conference Call.

With me today are Cromwell Coulson, our President and Chief Executive Officer; Bea Ordonez, our Chief Financial Officer; and John Byers, our Corporate Controller. Before we begin today's call, I would like to review the Safe Harbor statement.

This conference call may contain forward-looking statements about the Company's future plans, expectations, and objectives concerning, but not limited to, the Company's expected financial results for 2016. Words such as may, will, expect, intend, anticipate, plan, believe, could, and estimate, and variations of these words and similar expressions are intended to identify as forward-looking statements.

These forward-looking statements are not historical facts and are subject to risks and uncertainties that could cause the actual results to differ materially from those predicted in these forward-looking statements. These risks and uncertainties could include, but are not limited to, the risk factors described in the Risk Factors section of the Company's Annual Report for the year ended December 31, 2015.

The Company does not intend and undertakes no obligation to update its forward-looking statements to reflect future events or circumstances. In addition to disclosing results prepared in accordance with GAAP, the Company also discloses certain non-GAAP results of operations, including adjusted EBITDA and adjusted diluted earnings per share that either exclude or include amounts that are described in the reconciliation table of GAAP to non-GAAP information provided at the end of our second quarter earnings press release.

The Non-GAAP financial measures do not replace and are not superior to the presentation of GAAP financial results, but are provided to improve overall understanding of the Company's current financial performance. Management believes that this non-GAAP information is useful to both management and investors regarding certain additional financial and business trends related to the operating results.

Management uses this non-GAAP information, along with GAAP information, in evaluating its historical operating performance. With that, I'd like to turn the call over to Cromwell Coulson.

Thank you, Dan. Good morning and thank you everyone for joining the call.

For more than a year, I’ve led off each of these calls by talking about our mission and our strategy. Our mission at OTC Markets Group is to create better informed and more efficient financial markets.

We fulfill that mission by executing our strategy which is, operating world-leading securities markets. We share information widely through open networks that foster greater transparency.

We connect broker dealers, organize markets and inform investors. We deliver elegant, reliable and cost effective subscription based solutions for a future that is online data driven and social.

Our mission and strategy, along with our company values, provide us with a guide as we seek to execute our vision, provide more value to our customers, grow our people, improve our platform and deliver long-term returns for our shareholders. After robust growth in 2015, we’ve seen slower revenue growth during 2016.

The third quarter represents the first time in several years that we’ve shown a quarter-over-quarter decrease in revenue. That said, we continue to have impressive margins and strong cash flows, which come from our recurring revenue based subscription model.

That gives us the ability to keep investing in our platform during remarkable times when markets are very hot and in times where markets are slow. A number of factors attributed to our results this quarter, including continued contraction of our OTC Link broker dealer subscriber base, slower trading volumes and a restrained corporate financing environment.

Bea will discuss the specifics of our results a little later on. Despite these less favorable market conditions, we continue to push forward with several important initiatives during the quarter that strengthen our platform and continue to improve our value proposition.

The reliability of OTC Link ATS remains a top priority and we continued our record of 100% talk time of our core OTC Link ATS systems during trading hours. Our technology team including infrastructure core, web development and QA remains vigilant about assuring system uptime while developing new features and functionality design to deliver a better informational and trading experience for our subscribers.

Maintain reliability, continuing to derive new features and products for users and providing new value are key to supporting growing our user base in the years to come. To that end, this quarter we introduced Q Score, a set of liquidity metrics that provides additional information and insight to our broker dealer subscribers.

These metrics are the start of providing more data that helps consumers of liquidity better quantify, who are the best potential counter parties and to help consistent liquidity providers build their brand on our network. It’s a well-known statement that it’s not what you say you’re going to do, it’s what you’ve done.

And Q Score puts metrics about what liquidity providers have done to provide excess liquidity beyond their displayed quotations. And that’s really helpful for continuing to innovate in a dealer based network model.

Our technology and broker dealer compliance teams continue to devote considerable energy, effort and resources on meeting our responsibilities as an SCI and to the under SEC regulations. It is an important opportunity for us because many of the changes that we’ve instituted as part of SCI have been changes that help spring reliability, process, controls into our operations and has driven a review of our whole software lifecycle and operational controls.

But SCI compliance is a big lift and it’s a challenge and it’s also an opportunity for us because we need to deliver elegant, reliable and cost effective compliance with regulation, Regulation, Reg SCI and all the other heightened regulatory standards that the financial services industry is seeing. Both for our own obligations as a significant ATS, which market participants and regulators, rely on as well as the obligations facing our OTC Link broker dealer subscribers.

For us part of our product offering in the next few years is going to be delivering products that use technology and information to help broker dealer subscribers meet their regulatory obligations in a reliable and cost effective manner. But just as important as an internal focus on regulatory compliance, reliability and product improvements is a continued external recognition of our OTCQB and OTCQX markets.

Since our last earnings call, regulators from seven additional states have recognized our premium markets as securities manuals for purposes of their respective Blue Sky regulations. This includes Alaska, Colorado, Mississippi, New Mexico, Kansas, Nebraska and Georgia.

This brings the total to 12 states. These recognitions establish our data driven OTCQX and OTCQB market standards as a strong baseline of transparency for investors.

It also fits our information first model, which is about putting good information in the hands of - investors and broker dealers to have the market pricing represent not just supply demand, but the fundamentals of the companies. We continue to work with more states and - and is - our goal is really to get recognition across the country and to be able to work by a state-by-state basis for secondary trading recognition.

And with the states, the first state was the hardest to get and now we're building critical mass. OTCQX and OTCQB are designed to give innovative and entrepreneurial companies the public markets they need today, so they can grow for tomorrow.

These recognitions from regulators further enables our markets to provide companies with robust public markets that meet the state's high standards for investor information. Part of the platform business model is compliance in regulatory recognition.

And one of the parts of when you look at the history of NASDAQ, they didn't have every state in 1980 when Apple did their IPO, Genpact had already IPO-ed. There are a lot of states, Massachusetts rejected the Apple IPO, but they had enough states for Blue Sky recognition.

And we really see they gain a critical mass once we’ve reached the level that NASDAQ had, when Apple IPO-ed, we will have established a critical level of recognition for secondary - for secondary trading compliance on our markets to really close the competitive gap between our markets and the National Securities Exchange. We had eight companies graduate for our markets to a NYSE or NASDAQ listing here in the third quarter.

This maintained our position as the global leader in exchange graduates. It also showed that markets were generally slower.

The IPO window was closed all summer. We are also working to keep companies on our markets longer, so management teams have more time to execute their business plans.

We’ve consistently said that being public shouldn't be painful and that message has never been more important than now. As our market builds out, as the functionality gets closer to being able to deliver and information on trading experience for investors that's good enough is we will close the gap from the - from the exchange model.

In June, we filed a petition for rule-making with the SEC to extend regulation to A+ to SEC reporting companies. Experts across the industry are on record and support of this proposal and we look forward to continuing to work with regulators, legislators, and market participants on this and other practical solutions for smaller companies.

Reggae and Crowdfunding provide a regulatory framework that is tailor-made for online capital raising. Over the coming years we believe the capital raising will be - will be technology-driven and that this will expand access to capital and lower the cost for small companies.

We are championing all forms of online capital raising as the best path forward to lower the cost of capital and position our markets to be the leading destination for crowdfunded companies in the next five years. But we should be really clear.

Crowdfunding is a three to five-year play. The platforms are not developed.

The regulatory framework is not fully established. The investor base who is going to shop these platforms, has not yet been created.

But we are big believers that in five years the majority of capital raising will take place online, especially for - especially for smaller companies. Companies establishing a public market need greater access to capital lower cost and technology is the most logical and efficient tool available.

With that said, we have an opportunity because being public on a National Securities Exchange has become too complicated and costly. The IPO task force identified that small companies listing on an exchange spent $1.5 million a year in costs.

That is a big nut to crack. And the exchange listing model of lots of expensive experts that consume management time and make being public painful is hard to fix.

Our philosophy is to empower companies to provide current public information their investors need to analyze value in trade securities. Investors may then trade these securities through the online or institutional broker of their choice.

They benefit from an informational and transactional experience similar to trade in the list of security. But by staying true to our market philosophy, which you shared by most Internet-enabled businesses, we put the information in the user's hands, so they can make good choices.

Thus we allow market participants to decide the merits of an investment and use the power of technology to lower the cost of information distribution in electronic trading. With our data-driven philosophy, we recently launched the OTC markets’ research market price, working with ACF Research Edison and Sidoti as initial research providers.

With traditional research coverage tied to trading activity, it can be difficult for some companies to receive analyst attention for smaller investors to access research. The research marketplace gives OTCQX and OTCQB companies access to research providers with products tailored to meet their specific needs.

For some color, ACF research and Edison come from the U.K. They're regulated by U.K.

authorities. Sidoti is a U.S.

broker dealer with a fantastic brand name in small-cap company research. They are if you remember [ph] SEC regulated broker dealer.

So, what we're doing is creating the ability from a premium standpoint for companies to sponsor research and make it available. The tech study is taking place right now, which supposedly was going to create more research coverage.

We don't see that happening. Small companies don't have enough trading to fund research coverage, so there is going to need to be other models.

And we put our OTC market’s research marketplace is at the top of the three things we've done to increase research and really filled out the stack as the very premium offering. We also have in the middle our deal with Morningstar to do quantitative research.

This is data-driven. It is - it is important for two reasons, one to have a baseline.

And, two, by having a data-driven research provider able to provide it for our companies, we know that for our future of finance that is going to be much more technology driven that our data - the companies on our market’s data can be used by these quantitative electronic research systems. And finally the bottom tier of our - of our research analysis feedback stack has been Seeking Alpha.

We've been very closely integrated with Seeking Alpha for the past few years into place where we're seeing more analysis, some good, some bad. But crowdsourcing is a place where more information is being espoused about company.

There are challenges. It's new.

But I believe that by fostering company sponsored research from regulated entities, quantitative research, and crowdsourced and research analysis, we're creating the ecosystem around our markets. So, the big companies have choices.

Just a few weeks ago, we also announced the launch of our Transfer Agent Verified Shares Program with VStock Transfer and Olde Monmouth and Direct Transfer as initial participants. Through this program, we are working with SEC registered transfer agents to provide investors with current and reliable share data on OTCQX, OTCQB and Pink Securities in a timely, automated and more trusted manner.

Access to reliable share data benefits brokers, investors, and allow transfer agents to provide a higher level of service to their clients. Some small companies and big companies, but small companies have lied about their shares outstanding in their SEC filings.

So because a small minority has done it, investors take shares outstanding. They don't trust it.

And for a company approved, it's an expensive process of getting a lawyer to come in and verify. For us, by getting it direct from the SEC registered transfer agent, we're going to fix the trust issue and also by gaining on a monthly basis it will be much more timely and valuable to the market.

So investors can track if any dilution is coming in and the market can re-price itself. Finally, in October, we announced upcoming changes for OTCQX best market rules to reduce unnecessary complex saving cost.

The ongoing role of the OTCQX Advisor will change, allowing companies to take advantage of the benefits of public trading including visibility, liquidity, valuation, capital trust, with a lower time cost and burden, while still relying on trusted professionals for guidance and support. As we look at matching up OTCQX on an ongoing basis, we heard back from the companies that by having an annual confirmation from the third party advisors, it was creating a lot of busy work without high value we saw from the company.

And we also saw that the advisors didn’t have the scale that our team and technology platform had to monitor disclosure. Because once the company is public, what it really is about is making the disclosures making it to the market and then looking for the market feedback.

That’s how a market should work. And by removing the variability of the advisor work and really focusing on being at service for the information, we can now really match OTCQX.

As a competitor it definitely costs less than half what with the National Securities Exchange cost. We continue to make progress toward having Tier 2 NMS securities on OTC Link ATS in the coming months.

We believe that our dealer based markets will uniquely serve the needs of liquidity providers and smaller, less active NMS securities and the market participants who are looking for better executions and more liquidity. We will roll out this enhanced functionality carefully and prudently to allow us to progress to realize the benefits of our network based model for these securities.

By adding Tier 2 NMS functionality, we’ll continue to work with and for our community of broker dealers, companies and market participants to support smaller and global public company trading to build the next new network market. We are also looking at building tools that support, not just the market makers - the market makes for space and institutional brokers.

How do we support more institutions in our space and I think you’ll hear more from us over the coming year. Our market data defined revenue showed growth in the third quarter.

Our compliance data file is providing the data that brokers and clearing firms need to manage risk and we continue to work on the efficiency of our sales efforts for all of our market data licenses. Corporate services saw a slight decline in revenue compared to third quarter last year as the OTCQB market matures, we’re working together to bring the benefit of a strong public venture market to a larger pool of companies.

OTCQB is going through - we’re learning a lot as we look at the companies, some companies with the increased transparency won’t do as well as their model isn’t as good. But many companies see it as a real important step to establishing a trusted transparent public market, so they can grow today.

We continue to devote significant resource that is into building the strength of our OTCQX and OTCQB sales and retention efforts to grow the number of companies that find value in trading on a premium market. Finally, because we work for shareholders and delivering returns is important, I’m pleased to announce that on October 31, our board of directors declared a special dividend of $0.60 per share and a quarterly dividend of $0.14 per share, both payable in December.

Both dividends reflect our consistent commitment to providing thee peer shareholder return and distributing out excess cash. This is the third consecutive year in which we’ve declared a special dividend and the second year in a row with $0.60 special dividend.

The quarterly dividend marked our 32nd consecutive quarterly dividend and our sixth consecutive $0.14 quarterly dividend. With that I’ll turn it over to Bea.

Thank you, Cromwell and thank you all for joining. I will now spend a few minutes reviewing the results of our operations for the third quarter of 2016.

Any reference made to prior period comparatives refers to the third quarter of 2016. For the third quarter of 2016, OTC Markets Group saw a 2% decline in gross revenue to $12.6 million versus $12.9 million in revenues for the same period last year.

The quarter-over-quarter decrease was largely driven by14% decrease in revenues from our trading services business line, which recorded revenues at $2.5 million for the quarter. This quarter-over-quarter decline is primarily a result of continued contraction and consolidation in the broker dealer industry.

Including the loss during the third quarter of a significant subscriber, City groups ATV seized operations following its acquisition by a competitor. The number of active market participants fell 112 at the end of September 2015 to 108 at the end of the current quarter.

This trend toward industry consolidation together with a lower volume market environment generally contributed to reduced revenues from dealer license fees and [indiscernible] fees as well as reduced closed and message volumes. Our corporate services business recorded $4.8 million in quarterly revenues, down 1% versus last year.

This decrease was driven by a quarter-over-quarter decline in revenues from both our OTCQB market and our OTCQX market. In terms of OTCQB, 2015 saw very rapid growth in the number of companies verified to trade on that market, from 311 at the beginning of 2015 to 942 companies at the end of 2015.

This reflected the huge success of our strategic initiative to establish OTCQB as a premier venture stage market place. The former [ph] impact of this large influx with companies which was concentrated in the first six months of the year, drove significant, in fact double digit growth throughout 2015 and the first half of 2016.

The small decline in corporate services revenues that we’re seeing in the current quarter reflects an overall decline in OTCQB subscribers from 959 as at the end of September 2015 to 869 as of September 30, 2016. This drop in the ending count of OTCQB companies is a result of the higher rates, the compliance related downgrades and non-renewals that we’re seeing on this market.

During the current quarter we saw, 54 downgrades for non-compliance with our market standards as well as 10 non-renewals. The OTCQB venture market is a market for early stage and developing companies.

Given this, we expect to see a higher rate of return in this market when compared to the OTCQX market and would expect to continue to see a relatively higher rate of tenants. Also contributing to the overall growth in the ending counts of OTCQB companies, was relatively sluggish performance in terms of new companies being added to the market.

Market volatility, economic and political uncertainty both here and overseas are contributing to one of the slowest IPO markets since 2009. Faced with the escalating cost and mounting complexity associated with the national exchange listing, companies are electing to remain private for longer.

Despite these headwinds, we added 54 new companies to the QV venture market during the third quarter. We’re making investments in our sales team and refocusing our efforts in this area.

As a result we’re seeing a promising pipeline of new corporate services clients. Revenues from our OTCQX markets were also down 5% from the prior period.

We ended the quarter with 387 companies on our OTCQX market, down from the 404 companies in the market at the end of the third quarter of 2015. Again, unfavorable market conditions are contributing to slower performance in terms of new sales.

We added 16 new companies to our best market during the third quarter of 2016 compared to 22 in the prior period. Market data revenues were up 4% from the prior period at $5.3 million.

As of the end of the current quarter, we had 23,000 professional users of our market data and more than 11,000 non-professional users. Our enterprise level data products are used by more than 170 financial institutions, including banks, asset managers, broker-dealers, and clearing firms.

We will now review some of the expense line items. Operating expenses for the quarter were $7.7 million, down 1% versus the prior period.

Compensation costs, which comprised the biggest component of our operating expenses, were flat versus the prior year. Our IT and infrastructure costs were $1.4 million for the quarter, up 11%.

This increase reflects the run rate impact of the significant investments made in our core trading systems during 2015, as well as additional investments made this year to improve the reliability and security of our applications and systems. The increase in our technology costs were offset by decreases in professional fees and also in our marketing and advertising expenses, with the latter being largely a result of the shift in focus away from printed materials and, two, more cost effective digital mediums.

Our income from operations for the quarter was $4.4 million, down 4% versus the prior period. Our operating income margin contracted only slightly from 37% during the prior year period to 36% for the current quarter.

Net income for the quarter decreased 3% to $3 million, primarily a result of the decrease in income from operations, with this decrease being partially offset by a decrease in our effective tax rate. For the quarter, our effective tax rate went to 32%, down from 33% last year and this was a result of changes in state and local apportionment rates.

In addition to certain GAAP and other metrics, management tracks a non-GAAP measure adjusted EBITDA. Adjusted EBITDA excludes non-cash stock-based compensation expenses.

Adjusted EBITDA decreased 3% to $5.3 million for the quarter or $0.45 per adjusted diluted share. You can find a reconciliation of our GAAP to non-GAAP results in our press release, which is available on our website.

During the third quarter, we generated cash flow from operations of $4.1 million. This is up $1.4 million over the same period last year, primarily due to the timing of certain tax payments related to the third quarter.

Cash available for operations increased $0.7 million to $25.1 million as of September 30, 2016. We have a strong balance sheet with NASDAQ.

We benefit from a subscription based recurring revenue model, which produces consistent and predictable cash flows. We continue to operate an invested focus with capital allocation policy, which returns cash to our investors in the form of dividends and through our stock buyback programs.

In that context, as Cromwell has already noted, we were pleased to announce yesterday a special dividend of $0.60 per share and a quarterly dividend of $0.14 per share of our Class A common stock. Our special dividend is in line with the special dividend paid in 2015 and our quarterly dividend will mark the 32nd consecutive quarterly dividend.

Both will be payable in December and are consistent with our investor focused capital allocation policy. For the nine months ended September 30, 2016, we returned $6.4 million to our investors in the form of dividends and share buybacks.

This compares to the $4.4 million returned to shareholders for the same period last year and represents a net payout ratio of approximately 65%. In closing, the third quarter of 2016 demonstrates the resilience of our business model and our ability to generate consistent earnings performance despite market uncertainty and unfavorable macroeconomic conditions.

We operate and support a critical aspect of the U.S. equities market and enjoy a unique position in that market.

Our complementary business lines have diverse sectors of the financial community. We will continue to strategically and prudently utilize our operating cash flows to invest in the people and the technologies that will allow us to enhance our product suite, grow our subscriber base, and better serve our users.

It is through this continued investment in our people, in our knowledge and in our product suite that we will position ourselves to deliver consistent revenue growth and strong returns for our investors. With that, I would like to thank everyone for their time and pass it back to the operator to open up the lines for questions.

Good morning. Thanks for taking my questions.

Hi. Good morning.

Hi. So just a couple of questions, I guess just on the Blue Sky and another successful quarter, adding another seven states.

Can you maybe talk about - is there a point where a tipping point where you get enough states to stay beyond and that you think it drives a little bit more momentum in some new clients coming in?

Yeah. So, I mean, I think in the mid-30s is really that 30 - starting at the 30 level is really when we get to towards critical mass and - and there is the manual review states and then there is the other states is merit review states where a goal will be to be targeting, getting action from some of those we've had discussions with.

And those - and for those I don't expect the OTCQB market, which is really an information-driven market. It’s going to be more OTCQX and maybe OTCQX Premier for some of the more severe states.

But really - but really when we started OTCQX, the financial standards were actually taken from the State Uniform Securities Act. We added in the penny stock standards, because that's such a big piece for broker-dealers and this year there is a continuing penny stock standards coming in for QX, so there won't be penny stocks on QX is - there is - we've added, what I’d call, the common sense corporate governance standards for OTCQX, which again helps the merit review type states.

So, it's - it's a challenge - it's a challenge to work through each state, but they've been rather pragmatic and the states all look at each other. So, as they start moving, it becomes easier and easier.

And the SEC has preempted the states in a few different areas. So, one reaction of some states has been to fight preemption, but another reaction of more pragmatic states has been they say, “Hey, we shouldn't be giving them reasons to preempt us, if we can get our house in order, because they are aligned with the same goals, which is disclosure to investors.”

And I think last quarter you may have - I think you were a closer on the cusp of adding an additional state or I guess just how does the pipeline look in terms of adding new states at the current time?

So, I'm going to have Dan Zinn talk about the state pipeline just from an overview side, but the one thing is there is three different ways we can get them Some states have been writing them into the law, which is awesome, because it says OTCQX is the best market in their State Securities Law. Some states have been doing either exemptive orders or no action letters from their states and some of them have been doing an exemptive letter and no action and then putting into the queue for writing into their law, which is - the ideal part is when you get written into the law, you become the standard and - and a part of it is a lot of regulation, today we keep looking at Washington for what regulation is coming, but most securities market regulatory history has been regulators picking up on industry best practices and codifying them.

And if you look at what OTCQX is, investors and brokers look at it and say, okay, OTCQX, these are companies, they aren’t penny stock. They meet financial standards.

They've got audited financials. They meet best practices for corporate governance.

These are not - these are securities that shouldn't be in the problem side. And then you've got OTCQB, which is really a transparency first model and for states that fall into the transparency model and not every state will, but they'll buy into that and they buy in through the manual exemption.

And so it's a big process, but it's getting there to really turn us into a recognized public market.

And, Chris, I think Cromwell hit on the most important point in terms of the overall pipeline, which is that once you see momentum, once states see their neighboring states and regional states take this on, they're more likely to interact with us. There are a couple of states and Texas is an example that have publicly put out for comments, intended rules that are going to recognize our markets.

So, it’s theoretically a matter of time before some of the states come through. And we also have other states that are working with us on kind of draft language for orders and no action letters.

So, we do anticipate the pipeline to continue. It's obviously our goal to do this as quickly as possible and we're hopeful that states choose to act before the end of the year and some other states have heated up for next year.

So, I think it will be an ongoing process and obviously we’ll continue to keep everyone updated.

Great. I guess just another - a few more questions, but you talked a little bit about in the QB and 54 companies, maybe a little bit more refocus by the sales - on a sales initiative to drive growth in that.

Can you talk about where you go for the companies in the Pink market that you go to? Can you maybe just describe that a little bit how that refocus looks to drive growth in that market?

So I think we - the Pink companies were the easiest.

Yes.

Because it’s like - it’s the least structure both - both QB and QX, so Pink is a skill set of - of we know who the companies are in marketing to them. And we've - at the beginning of the year, we - our sales team started to change.

We lost some mid-level people who after they went to law school. They went off to do startups on their own, which is a standard side.

And I would say - and we split up our team. We moved some people to really push out into the international space again, so - and we - and rebuild our domestic team.

Now we've got a sales team, which - which I - which I believe is fully staffed and - and really - and really educated and able to go. So, that opportunity is there.

Then you’ve got the other opportunities. The IPO window is closed.

You're not going to see as many companies coming in doing the corporate financing type areas as Canada, we're seeing better traction in Canada. If you look at Canadian markets, historically Canadian markets are doing well.

We’re a great opportunity for Canadian companies to get their foot into the U.S. And - and that's - so - so for - so for us it's - it's going to be a mix of securities that are of the securities that are in Pink and then other securities coming in.

Can you just touch on the addition of the transfer agent program? How does a new program like that get implemented into your offering and the response?

How do you grade the response or the feedback that you’re leasing initially?

So, initially it's something where we've been working on for two or three years and you have a bunch of conversation. People show some interest and then there is vendor - technology vendor to talk about and then - and you talk, talk, and then suddenly you get someone who is really motivated and that firm gets motivated and then everybody else starts moving along and then it becomes a market standard.

The transfer agent community is a pretty small community. This is fixing our real problem in timeliness and trust and transparency of shares outstanding information.

Now, what it also does, because we're going to have better shares outstanding information than you can scrape from hedge fund filings. So, it makes our company data file, our compliance file become the default standard.

And if you look at what we've been doing with our compliance file, we're reaching a tipping point, major online brokers, bulge bracket firms and clearing firms using our compliance file to do a couple of things. One, remove risk of the higher quality more transparent companies, so their clients could easily trade them and do business.

And, two, at the low end, put restrictions down for the companies like Pink no info securities have become less than 1% of our dollar volume. And that's really because of the compliance file in our corporate information is going to brokers and they're clamping down plain vanilla companies.

This is creating a dynamic where companies get more of a benefit, the better transparency they provide, and the higher they move up in the markets, because they can demonstrate their - their disclosure and their compliance process. So, where I see these type of tools will move - will move in the next three years to very high penetration in the transfer agent we need, is I fully expect that we will fail.

But that will totally change the dynamic and we will have done it with technology where the New York Stock Exchange, if companies were lying about their shares outstanding, they'd say you need to have a Special Board Committee with outside consultants and you need your law firm to spend 100 hours a year verifying how many shares you had outstanding. I mean that's where we've totally changed the technology and transparency.

Great. Maybe just two more questions.

Just touching on the - professional users were up, I think, 6% in the quarter. Anything specific behind that?

I think it's the highest number you’ve had that I've seen looking back over the data?

Sure. So, we've been strategically pushing obviously in that area and we've talked about it for several quarters in terms of pushing for growth in that area.

We’re looking at this reported number just because - for those not familiar necessarily with the market data process, those are based on reported numbers from the various redistributors who display all data and push it out for users. So we are looking at some of those reports just to ensure that they’re entirely in keeping with what we would expect to see.

And so those are the valid reported numbers. But we wouldn't expect to trend in that sense of growth to continue for the next coming months.

I mean there hasn't been a big dynamic. But if you look at our market data business, you have to kind of - like one of the reasons people turn on our market is that like when Fannie Mae was trading hugely actively, our market data business with sales did really well, because it's kind of like your Netflix and you have an exclusive theory, the theory people are going to want, HBO has [indiscernible] and the CBOE, they have two exclusive products and they've built their incredible franchise around that.

So, each market data stream, you have each company, can become - it's never going to - I don't see us creating what the CBOE has in two stocks. But for us, as we had securities that have interests, that's going to drive our growth.

And I think so many times you’ve had a relatively slow market, which on Wall Street, which has - which has not had those hot markets.

Sure. And just touch on the - just the market, I guess, itself in general, any thoughts and what helps stimulate a better IPO market and maybe how far that is out?

So, online capital raising, I mean, we had earlier [ph] on the first one, then the IPO window closed. I mean it was a real like the door closed.

We've had a few deals go along and haven't made it and you could say either consumers were smarter or bad luck, but if I look at the trend that is taking place in online in crowdfunding in the UK is five years ahead of us. It has got great demographics and SEC just approved actually fantastic rules which are open up state based, regional crowd funding which is also going to create a whole much more equity securities that can train a year later.

And so this whole crowd funding online capital raising trend is going to do two things. It is going to create a whole bunch more equity that are owned by distributor shareholder growth that need a place to be valued and number two it has gone lower the cost to capital.

So you can have these companies that are used to raising capital by making disclosure available online but don’t want to do it, don’t want to spend the kind of money on it is and I think that really for us is getting our markets to be able to offer and form deficient alternative by not having the time commitment and the pain of a national exchange listing.

Thank you very much for taking my questions, I appreciate it.

Hi guys, congratulations on the impressive performance for last few years and congrats on being an innovator and disruptor in the markets. I have few questions here regarding the recent performance, what you guys feels to say as sustainable long term run rate for the future return on equity or what was your goal?

We don’t make those predictions like forward looking statements are not a place we want to go. I mean you can just, I own a big chunk of stock on my own as the CEO and the management team is young, they are motivated.

What we are really looking at is what's the business is going to be in five years. And how do we get there and what are the things we want to be about being super in five years.

Now we like margin because businesses without a margin don’t do well when times get tough and we all know wall street has cycles despite the fact that we are never going to get in trouble for what we did last time, so we are safe this time but - so we run the business to be a conservative in cap structure. We have a margin for taxes and things go bad but we constantly through good times and slow times we keep investing in our people in our platform to build value.

With that being said, that margins the line of credit you have available with JP Morgan Chase I believe it is $1.5 million, what are the terms on that line for example the interest rate floating versus fixed?

I mean that’s just there for fun.

We have never drawn on that.

So like that the credit line is there, it is just so we are in their credit system and they are tracking us. It is kind of like having credit card that you don’t even use.

So you look at our cash position and we have a strong cash position but we also return excess cash to investors.

Sure and you guys have alternative longer term sources of capital at fixed rates?

We don’t, - I mean the way you run the subscription business anybody could need start following to make subscription business for it is not going to be in the subscription business very long. I mean our customers every month tell us what they think our services are worth and we have to live within those means.

Do you guys know what your weighted average cost of capital is?

Those are internal what we would look at for.

Okay so another question regards with your IT - new initiatives are interesting and look like they all probably propelled the company forward. The expense have been increasing at about 20% I believe and what is the - I guess what is the investment in the mobile space where do we see that technology moving towards?

Yeah, I mean mobiles are a place where we need to make our left side better for; you are not going to trading or not moving to mobile. I mean and if I as a trader and they told me oh yeah, we are going to have you trade remotely of your iPhone; I would think that would just be a trick to get me out of the office, so the machine can take over.

So that part is, I think for our website search ability for all of those things, those are projects we need to execute on but the overall, I look at par data is that there is a big part of our data business is going into this ecosystem, been in the last fifteen years this transformed trading and those providers whether it is Yahoo Finance or the E-trades they are all going mobile and we just need to make sure that our data's are part of that and then we are able to monetize it appropriately.

Let me actually ask the question different way. So like the crowd funding adventure stage market places, how are you guys differentiating yourself within these categories?

So we see the crowd funding online funding parts really as online investor events. So they are going to become, NASDAQ famously dealt themselves on the four horsemen of Hamrick, Montgomery, [indiscernible] and a couple of others of doing these, we see these online capital raising places as creating product that is eventually going to be a free trading security and we want to be offer the cost competitive public market using technology.

And the network effect for us is once the securities traded on our system you can create an information experience and trading experiencing through the online brokers, through the financial information providers, through the institutional brokers, it is very comparable to an exchange listing. And that massive network effect is hugely valuable for creating value in your equity securities and your business.

Excellent, so last question after paying the regular and special dividends that total distributions little over 8 million of total outstanding shares what do you, what is the remaining cash position after that distributions of your guys have on hand?

As we said our cash available for operations at the end of September was little over 25 million, obviously as Cromwell pointed subscription business until we have incoming cash flows every month in terms of subscriber base that are ending cash flow end of September with 25 and as we said with special plus the quarterly amounts to about 8.

Okay great, thank you guys again. Congrats on the impressive performance last few years.

Thank you.

Yes thank you good morning. I had two quick questions on numbers, I am just running on the tax rate whether the Q3 had any one off items and in other words is there level we can expect going forward.

And other number related point was on the marketing spend I think indicated to cut off that reduction was coming through and moving away from paper. Therefore I was wondering whether that game that is something - which is likely it is carrying forward or whether it is also reflecting the current market background and therefore we all tailoring the marketing spend till that and then the other non-number question is whether you could make any comments on the Finrey ODF [ph] proposal, Bea what you said in the statement.

Sure, I will take the first two and then Cromwell and Dan will like to speak through the ODF. So in terms of tax break, yeah there is an element of one off adjustments that are driving down that quarterly tax rate it doesn’t explain the entire drop, but there is an element of adjustment that sense around how certain state calculate the amount of income that you have portioned to that state, whole state income tax purposes.

So we have a small cap of adjustments in the quarter that is pushing down that rate but also we would expect going forward that rate would be lower than it has been historically as a result of some of those changes. In terms of the marketing sense yeah as I said on the call I mean one of the big drivers is a move to more digital medium.

So to your point there are other drivers and we would expect that to continue, there are other drivers also around really adjusting our marketing spend to a quieter environment and quieter sort of market conditions in general and being more prudent and strategically in terms of the number of events, we host and attend and looking at that spend fairly critically. As we said we don’t make four projections, would we expect that trend to continue, one things you look at will certainly continue to see sort of slightly lower spend I think in terms of digital versus paper but we might see that pick up, we never been shy and we will continue to spend where we think the revenue opportunity investment in terms of marketing and sponsorship and so on.

Sure.

On the Finrey ODF question, we gave a little bit of an overview in the quarterly of how we feel, we are going to be filing a letter in the coming periods as it runs to the end of the month. We have something on file to take a closer look at our position.

I think it is pretty clear we are following it very closely we are talking to interstate participants as well, but they are feeling some of them are affected in different ways than we are and so you will be made aware very quickly of arguments in relation to that.

I mean, at the end of the day there is no electronic trading capability, so quote system doesn’t really work if the computers can't connect. I mean one feedback we gotten where the firms might have said five years ago if our trade maps are genuine [ph] software had problem, keep the quotes going they just make shut it all down and so that’s - and Finery doesn’t want to be in the trading business or the market operations.

So from a standpoint for us we don’t see as a great proposal for the industry is - and a big concern is like [indiscernible] operating system they are not really a low cost operator and they force firms to pay and it is more cost coming in this phase which regulatory cost I think the broker dealership base are the biggest cause of contraction. So that’s the side of we hear the concerns from broker dealers.

This doesn’t solve our problem, we wouldn’t want to use it and we don’t want to pay for it.

So it is not seen as a direct replacement potentially?

Well it is hard for them to operate a market because remember a lot of the problems in the [indiscernible] board space when they have been SEC reporting was lacks a basic manner of interacting with public companies. They really didn’t do I mean we take an active role of companies of a helping companies provide more disclosure but also at the low end we flag things coming at four, which are critical matter for broker firms and clearing firms are locking them down.

So here you kind of have been operating market is something they do horribly and it affects the capital formation process both for the companies that need a good capital formation process and it is left for the companies and people who abuse the capital formation process use generous names to further their fraud [ph]. So for our side is, this is a long process and we are pretty aggressive in the space and the final part is within Finrey this is not a well-supported proposal.

Great thank you very much.

Thank you.

Great, thank you everyone for the call and we look forward to talking to you either one on one or at the next conference call.