Dan Zinn - IR Cromwell Coulson - President and CEO Bea Ordonez - CFO

Chris McGinnis - Sidoti & Company

Thank you, operator. Good morning and welcome to the OTC Market's Group second quarter 2017 earnings conference call.

With me today are Cromwell Coulson, our President and Chief Executive Officer and Bea Ordonez, our Chief Financial Officer. 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, including but not limited to the company's expected financial results for 2017. 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 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 Factor section of the company's Annual Report for the year ended December 31, 2016.

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 the company's earnings press release.

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.

The goal of this call is to give insight into our performance for the second quarter and our activities during the quarter reflect our long and short term priorities. We continue to be guided by our mission and our strategy.

Our mission 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 to 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 and it is online, data driven and social. Our mission strategy along with our company values provide us with a roadmap as we focus on initiatives that will improve our technology platform and data driven products, provide value to our subscribers, create growth opportunities to our people and continue to deliver long-term returns to our shareholders.

We had a good second quarter, delivering strong top line revenue growth and double digit growth in our operating income. Bea will cover our results in more detail.

I'm also happy to report that we reached the halfway point in achieving national, state Blue Sky recognition. 25 states now recognize our OTCQX market standards for purposes of their respective Blue Sky laws.

We are approaching an important critical mass of state recognition, NASDAQ had approximately 27 when Apple and Nike IPOed, so this is really a really important event in regulatory recognition we're getting to. Our OTCQX and OTCQB markets were recognized as established public markets by the FCC in 2013.

And with each and every new state recognition, we're building our reputation for offering efficient public markets that work for both companies and brokers. Regulatory recognition demonstrates that our data driven standards provide a strong baseline of transparency for investors as a further step towards our goal of making public markets less painful.

During the rest of 2017, we expect to continue to achieve Blue Sky recognition for more states and we'll pursue additional regulatory recognitions domestically and internationally. A core strategic goal in the long and short term is to continue enhancing the services we offer our broker dealer subscribers.

OTC Link ATS supports a diverse community of broker dealer, providing liquidity and execution services in a wide range of securities. During the second quarter, we maintained our targeted focus on delivering a better informational and trading experience to broker dealers and investors.

As we face change in competition, our ability to adapt will last to provide superior services that meet the needs of broker dealers and allow them to easily trade securities in a cost effective manner. We continued our record of 100% uptime of our core OTC Link ATS systems during trading hours in the second quarter.

We call out this achievement every quarter because it exemplifies the ongoing commitment of our business technology and compliance teams. It a group effort and our focus on reliability is in keeping with our status as an ATS covered by the SEC's regulation FCI.

Another key priority for 2017 is supporting industry initiatives related to small company capital raising. We need to make it easier for public companies to raise capital publicly.

In that context, in July, we were pleased to see the Improving Access to Capital Act, a bill based on our SEC petition for rule making and support from the small business community gained bipartisan passage through the House Financial Services Committee. The act would extend Regulation A+ to SEC reporting companies, providing a much needed capital raising option for many small and emerging companies that have undergone the expense and compliance cost of being SEC reporting and raising the profile of Regulation A+ as an effective capital raising tool.

We are excited about the prospects for this and other practical proposals that will provide an opportunity for small companies to use more transparent public offerings and innovative technology driven online platforms, supporting these initiatives will lead to less red tape and more efficient capital raising, which are good for all public markets. Finally, I'm pleased to announce that on August 8, our Board of Directors declared a quarterly dividend of $0.14 per share payable in September.

The dividend reflects our ongoing commitment to providing superior shareholder returns. This marks our 35th consecutive quarterly dividend and our ninth consecutive $0.14 quarterly dividend.

With I'll turn the call over to Bea.

Thank you, Cromwell and thank you all for joining the call. I will now spend a few minutes reviewing our results for the second quarter of 2017.

Any reference made to prior period comparatives refers to the second quarter of 2016. For the second quarter we generated gross revenues of 13.8 million, up 9% versus the prior period.

Corporate services revenues were up 1 million or 21%. We saw growth in each of the main components of our corporate services business line.

In relation to our OTCQX market, retail revenues increased by 377,000 or 24%. This is primarily from price increases effective for all companies for the 2017 subscription period as well as from the full-period impact of the 60 new companies added during 2016 and the 40 new companies added year-to-date.

Revenues from our OTCQB market were up 393,000 or 18%, a result of the full period impact of the 227 companies added to the market in 2016, strong sales in the first and second quarters, improved retention and a decrease in the number of non-renewals and compliance related downgrades. For the year to date we've added 139 companies to the market, while our rate of churn from non-renewals and downgrades has dropped from 21% to 17% on a year-to-date basis.

Revenues from our disclosure in see service were up 189,000 or 24%, a result of reduced churn and uptick in sales for the first two quarters of this year and price increases introduced in February of last year which took effect for company's renewing services since those increases. We are encouraged by the continuing trend of strong sales of our issuer services, 21 new companies were added to the OTCQX market during the second quarter versus 11 added in the same quarter last year.

This brings the year-to-date total to 40 which compares to 24 during the first six months of 2016. Our OTCQB market welcomed 57 new companies in the second quarter, up from 45 to the prior-year period.

With 139 companies added to be OTCQB market so far this year, our sales are up 38% versus the same period last year. Trading services recorded revenues of 2.5 million for the quarter, a decline of 161,000 or 6%.

We've spoken before of the challenging environment and strong headwinds that we continue to face in this sector of our business. A low volatility, low volume trading environment as well as continued contraction in consolidation in the broker dealer space.

During the second quarter of the current year, we saw the loss of another two active participants. We ended the second quarter with 97 active participants, down significantly from the 112 active dealers on our platform as of June 30, 2016.

The contraction in broker dealer subscriber base contributed in the second quarter to a decrease of 122,000 or 10% decline in combined subscription revenue from OTC dealer, licenses and fixed connections. Market data licensing revenues were 5.5 million for the quarter, up 285,000 or 5%.

This is primarily a result of significant growth in the number of nonprofessional users consuming our data, with approximately 16,200 such users as of June 30, 2017, up from 10,800 as of the prior-period end. This reflects both the increased reach of our market data distribution network as well as broader investor participation in the equity market and contributed in the current quarter to a 110,000 or 36% increase in non-pro user revenues.

We continue to see strong sales of our data licensed products, especially of our compliance data products. Our compliance data file and compliance analytics products are now widely used by clearing firms and investment managers to automate their risk processes.

Sales of these data licensed product as well as price increases introduced effective to 2017 drove a 144,000 or 40% increase in related quarter over quarter revenue. We saw a 1.3% decline in the number of professional users of our market data with approximately 20,600 users as of June 30, 2017 versus 20,900 as of the end of the prior-year period.

For the same period, the number of professional subscribers to [indiscernible] for exchange-traded securities also contracted by 1.4%. We have maintained our relatively modest share of SIP users at 7.5% of the total as of both June 30, 2017 and 2016.

During the second quarter, operating expenses increased 383,000 or 5% to 8.3 million, a result of increases in compensation, occupancy and IT cost, partially offset by decreases in professional fee and marketing expenses. Net income for the quarter increased 590,000 or 23%.

The increase was primarily related to the 17% increase in operating income and was also impacted by the adoption of 2017 of new accounting guidance related to stock-based compensation. This had the effect of reducing our expected tax rate for the quarter to 36% from 39% for the prior-year period.

In addition to certain GAAP and other measures, management utilizes a non-GAAP measure adjusted EBITDA which excludes non-cash stock-based compensation expenses. Adjusted EBITDA for the second quarter increased 15% to 5.7 million or $0.48 per diluted share, up from 5 million and $0.42 per diluted share for the prior period.

We continue to produce solid operating cash flows ending the quarter with 22.6 million of cash on hand and no debt. We operate an investor focused capital allocation policy which returns cash to our investors in the form of dividends and through our stock buyback program.

Through the first half of the year we have returned 5.2 million to shareholders, an increase of 1.6 million over the prior-year period and yesterday announced our 35th consecutive quarterly dividend. In closing, our first quarter delivered 9% top line revenue growth, a 300 basis point improvement in margins and a 17% quarter over quarter increase in income from operations.

We operate a critical aspect of the US equities market, serving diverse sectors of the financial community that are critical to a capital market ecosystem that supports entrepreneurship and job creation. We will continue to prudently invest in technologies and products that will allow us to better serve our clients and that will position us to create greater value for our shareholders.

With that I would like to thank everyone for their time and pass it back to the operator to open up the line for question.

I guess to start off, it was I the release you made a small acquisition of OTC.today. Just taking a quick look at their site, it seems like there is a lot of information.

So maybe just talk a little bit about the reason for the acquisition and what it adds to the OTC market.

I mean from a bigger picture, promotion is a problem in the space if it is fraudulent and in a manner that breaks down the market pricing process. So markets deal with lots of good information and bad information and their job is to price something, but promotion is one of the forces in the market.

So what we want to do is this site had been tracking promotion and it's on a website you can go look at it. But we really want to digitalize the data stream so it can go into the brokerage into brokerage firm's risk control areas, so investors can be warned when a security is being promoted and we can drive some more transparency.

I mean, one of the things we've always like to do in the space is go into the room and turn on the lights. And technology wise, information is - it was about putting information on a screen for humans to see and now we're moving from the screen to the machine era.

And this is a great dataset to add into our compliance products. There's a risk for brokers is if a security is being promoted you don't want to be handling the shares of the promoter shares.

That said, I look at promotion and the data is pretty clear. Last year, of dollar volume of trading two thirds of the dollar volume of trading are promoted securities on that site, where NASDAQ [indiscernible] names.

So promotion is something that goes across the small cap world. And for us it's a symptom of problems in the private placement market of the low end of private placements are essentially acting as unregulated underwriters and they're using anonymous promotion to drive demand.

So we believe a better path is going forward is to make public offerings where companies can sell shares in an efficient technology driven process directly to investors. And is because we've broken our financial markets if a company has to sell shares to an intermediary and a private placement and then they go out into the public market.

So that's our longer term big term picture. But I think you're going to see us looking for, are there data sets that are useful on a screen that we can digitalize and make it useful into a machine.

And I guess on that point, you did see a nice uptick in the compliance services. Are those - maybe just talk about that product a little bit more, is that relatively a newer offering and are there more coming to market to kind of help [indiscernible] increases on Q2.

It's a product that we've been working on for a while to get critical mass. It is an enterprise sales product which has longer leads, but it's also much sticker.

And we don't really talk about what you know new is going to go come to market because is but you know we want to make our data more useful, we want to add datasets that make it more useful. And the OTC today it seemed gimmick to create an additional data product around.

And it's a bit of work, I mean these things it's like it's a small acquisition but then okay, we have to bring a process in. It helps us though and in both our oversight of companies, our understanding of the market and our ability to service broker dealers and it lets us bring hard data because promotion is a subset in less than 2% of the dollar volume in our market, in overall trading volume, so it's a small subset but it's a highly visible subset.

And it affects small companies in our markets and non-exchanges.

Maybe just a couple of different questions, I'll hop back in the queue in case if there are other callers. Just touch on the Blue Sky, you talked about that critical mass.

Do you expect the - that your - do you see a pathway to getting to that critical mass part by the end of the year. Obviously pretty solid through Q2 under the new states coming on board.

So I'm going to hand it to Dan because he's got a map on the wall of his office, which we color in with blue and I come by and I ask questions about how do you get from this state to this state and how do we cross these places because you know it is a state by state game. And there are different, the different states have different standards which is fine and some states are more disclosure driven, so we get QX and QB, some have merit standards so they're only really going to want to do OTCQX which has the financial standards and the common sense corporate governance that looks a lot like NASDAQ in the 90s from being a more small company and global company friendly market.

Dan?

So Chris, yes, is the short answer to your question. We do expect to keep moving towards that critical mass.

Cromwell mentioned the number, 27, which is certainly well within reach; there is one more state that we're not including in our number that has a public rule filing out there, so we know that one is coming and a number of others that are working behind the scene. We talk about this in past quarters, it is the slower process when states are doing rulemaking as opposed to doing some administrative orders or no action letters.

I mean every state has their own process to run through, but we've identified a path or an approach in just about every state and jurisdiction. And so we expect to, at every quarter, have some nice updates about where we are and how we're growing.

And I would imagine, at this level now, is it easier to go into the states with a little bit, looking that you have 25, does it make the conversation a little easier?

It does. I enjoy now sending out emails with the links to all of the existing orders and letters.

So it does. Like, they're all regulators and they all want to make sure they're doing the right thing and they gain some degree of comfort by seeing that other people have gone through this evaluation process and come to this conclusion.

And 25 is a number that's tough to ignore. So we're not really getting pushback from states and this isn't a great idea.

Most of it is just - it has to work its way through the process just to get the right people to focus on it for a period of time. So it definitely does build momentum in the more states we get.

And one last question and I'll hop back in queue. The companies under non-compliance, that dropped, but also your retention rate again picked up in the quarter, can you maybe just dive into those numbers a little bit, is it stronger companies that you're working with, can you just give maybe a little bit of a color behind those improvements in the transit?

So I mean, I think it's all of those things that you touched on. It's the strengthening of rules overtime, it's the maturity of the market, obviously the QB market is a relatively young market and I think what you're seeing as the market matures is the companies on the market reach a different cycle in their development and as we learn, as we go along in terms of constructing a market that actually works for the participants and has good governance rules and everything else that we're reaching sort of somewhat of an inflection point in the mature cycle of that market and seeing some of the benefits of that in terms of lowered non-renewal rates and lower churn rates related to compliance downgrade.

And just OTCQB was a relatively new product. So QB had, there is a bit of a product market of, product market fit and with QB, we were able to raise standards for QX.

So there - with that expectation, there was going to be some movement around that to right fit companies that are ending up in there and as you get to smaller companies, if you look at any software as a service business, you have shorter cell cycles, but you have more churn in the SME space than the S&P 500 space. So that part of it, we have a product, which is pretty lightweight and efficient for companies and that's - and that is - so if they can come in more easily, they can also downgrade or upgrade or graduate, so that's really a process that we've built, which I think is a part of offering a more efficient public market solution for companies.

And when we think about efficiency, the efficiency has to be at who's paying for it, which is the company and their management and listing on an exchange is a fantastic product, but it's complex, costly and time consuming for management. So if we can create a product that has a lower time suck, and it's efficient for public companies, we think we have a very disruptive product and we do it by being different because we focus on informing investors with the right quality of information, but not overwhelming with a quantity.

Just wanted to first congratulate you on an excellent quarter, very impressed results. And then, do you guys have any updates on FINRA's ODF proposal or just kind of an idea of the regulatory environment as things now stand politically versus say a year ago.

To answer the first part of your question, there's no specific update on the ODF proposal. It was out there as a kind of a request for comment, is that the kind of thing we should do and it hasn't moved past that phase.

So we will certainly include that in our disclosure if and when there's movement there. More generally, it's tougher to say there's been turnover obviously at both FINRA and at the SEC.

And I think we, along with everybody else, are still kind of evaluating what that's going to mean for the specific things that impact our market. So the working relationship aspect of those two organizations is still pretty strong.

We're familiar with the people up and down the staff and so the conversations, the day to day kinds of things remain the same and we will continue to talk to people kind of about the leadership and see what their goals are and how that fits with what we want to do.

And then as far as the New York stock exchange come in with our Global OTC market or platform, has that had any noticeable impact on your business?

If you look at market share, they're separated. We put a lot of work into making it painless for our broker dealer subscribers to connect to them.

And, but their market share has stayed about the same. So, our first part, what, our first part, which I'd say we've completed was making it easy for our subscribers.

The next part is how do we, for a long time, when they were a subscriber, Global OTC provided a service for a type of trading and now that they're separate is the opportunity to provide that service ourselves. That said, our OTC Link ATS, the dealer quotation system.

If you look at how the market structure is, the majority of trading comes through online brokers that is competitively and superbly satisfied by the Citadels, the Virtue Financials who now include KCG, the Susquehanna's G1X. There's the Jane Street providing competitive ADR prices.

There are lots of smaller brokers and there's competitors down, the big names, the big name firms of the citadels and virtues that everybody knows, but there's also other competitors out there shooting for those businesses too. So, but all of those are trying to do more trades on their systems and our OTC Link ATS is really designed to help broker dealers do more trades on their system and when they've only got half the trade to find the other partner at the lowest cost.

And so we still think it is going to be the superior platform for the 800 pound guerillas in the space.

Congratulations on the growth this quarter, given the historic circumstances. Regarding the corporate services increase, I was just curious to know how the 20,000 OTCQX subscription fee is collected.

Is it like the majority upfront or incrementally broken through throughout the year?

No. It's entirely upfront.

So the OTCQX companies join on a calendar year subscription basis. So it's calendar year to calendar year and it's paid upfront in full.

And then in regards to the petition with the SEC for rule making requesting that SEC reporting companies be permitted to offer securities through Regulation A+. How do you guys see that as benefiting OTCM and the markets overall?

Well, it's going to benefit OTCM, it's going to benefit NASDAQ, it's going to benefit NYSE, it's going to benefit all small companies because Reg A has a couple of advantages. There's the test the waters advantage, there's a general solicitation advantage, there's a Blue Sky federal exemption advantage and it wraps into, as a company, you can use a Reg A offer direct to investors from your website, you can use an online financial portal and you can sell through the traditional broker establishments.

We've had successful Reg As and in the last few months, the exchanges have all had some successful Reg As and they've been pretty much still the broker sold ones and we really think our market is going to line up with the offerings that come through financial portals or companies are going direct on their website, as this becomes an understood offering process with a critical mass, but Reg A is bringing back - is an opportunity to bring back the public offering. And we think that's a really important, aside from proving capital formation because there is a lot of discussion we have on market structure of how can we fix market structure, how can we do some tweaked out, how trading markets work and suddenly all these public companies are going to come back and it's actually the wrong thing to focus on.

There are improvements we can do to market structure, but the real thing to focus on is how do we improve access to capital if you're a public company and the fact that every small public company does a private offering that are on NASDAQ New York for the OTC market to raise additional capital at a discount to their market price, we want to bring back the public offering. Number two, it's too burdensome to be public, to be a public company.

It's costly, it's complex and then there are things you do to improve markets. I think what we're focusing on is streamlined and simplified requirements that lower the complexity and cost for small company listed in compliance, a focus on quality, not quantity of information for investors and getting information not just from the companies, but from other sources.

If you track what we're doing with transfer agents, we're providing to investors and brokers more real time higher quality share issuance and market cap disclosure by getting a direct connection from SEC registered transfer agents on a monthly basis. That's something that informs investors and brokers of the quality information, but it's not burdensome to companies.

And finally, our quote driven markets that have market makers and can diversify the investor base and through online brokers. So, and this is not just - there was a report done by the Milken Institute and the World Federation of Exchanges and they made three recommendations to securities market regulators.

Number one, the complexity, cost and scale of listing and maintaining a listing should be reduced to incentivize the use of equity markets by SMEs. Number two, the quality, not the quantity of information available about SME should be enhanced.

This includes information the SMEs disclose for regulatory compliance as well as from third parties. Number three, mechanisms should be introduced to enhance secondary market liquidity in SME's stocks and on the SME markets such as dedicated market makers, expanding, diversifying the investor base, exploring alternative secondary market trading models such as a quote driven market.

I mean, the Milken Institute and the World Federation of Exchange are recommending the models we've created. The one thing they missed is low cost access to capital and the only way we're going to do that is by using technology and transparency, so companies can connect with investors online.

Just to add to what Cromwell said on a more specific level, the proposal from our end, which started with that petition for rule making really was borne out of conversations with the companies on our markets. So, we had SEC reporting companies that were looking for capital raising options, came to us and others and said, Regulation A looks interesting, this is the kind of thing I've been waiting for, how can I do it.

And the answer is, you can't, it's not open to SEC reporting companies. And so then companies are faced with a choice of do I deregister and stop providing the information that my investors have grown to rely on in order to take advantage of this capital raising and so in conversations with the SEC and then more recently with Congress, it's become clear that these companies are already making the best available information and putting that out there and so it's a logical next step to open this opportunity to them.

And as Cromwell mentioned during his opening remarks, it's going to raise the profile of Regulation A as well because you're going to see companies that already have a public market that are already a little bit higher profile, taking advantage of it and so it's mutually beneficial for the company's interest.

Yeah. And these are long ball, long game things.

These are not things that are like, oh, wow, we're going to kill it next quarter on, but creating the right environment and being an advocate for a company's success will make markets for company's securities a fine business to be in, in the long term.

I have three questions. First one on the, as it relates to the number of companies in QX and QB.

I think sequentially, there is a small decline in the quarter. I just wondered, if from your analysis of the churn, as they're leaving, whether that gives you confidence that actually you can get to a net increment looking forward?

Secondly on costs. I was wondering whether if we look forward and thinking about potential seasonality, whether there is anything to particularly to take into account there, which might impinge on maintaining or improving the margin improvement you've already seen.

And the final question is relating to the non-professional data license products, where you're seeing that very good increase. I'm just wondering if you can say more about that and whether you see a lot more to go for there, whether we're seeing a sort of step up and then it would come to be a more moderate progress?

I'll take the initial question, which I think you were looking for, little more color on the trends that drive this quarter versus the first quarter, a small declines in the number of companies in each of the premier markets. I think that was your question, right, Andrew?

Exactly right. It's a very small percentage difference, but I was just wondering, given the increased sales level you're running at now, whether when you look at those ones leaving, you can actually say, well, it's good reason to be hopeful, looking forward that we can perhaps move into net positive?

Generally, we like results from working hard rather than wishing. So reason to be hopeful and that's really why we don't like giving guidance.

But that and - but, I will hand it back over to Bea.

So let me just add some color, so look, there is a little bit of seasonality if you like in both of those markets, we touched earlier on in the QX being an annual subscription. So at the beginning of the year, what we tend to see is a slight dip resulting from non-renewals for that calendar year period and then over the course of the year, it's what's we continue to sell.

Obviously, you see an upward trend through the rest of the year. This year, that was compounded further, because as we talked about on prior calls and in our releases, we did introduce those stricter and more enhanced rules around penny stocks and so on, which came into effect for existing companies for this year and resulted in 26 downgrades right at the beginning of the year for the current subscription period.

So we started at a somewhat lower level, despite a much improved overall retention rate for 2017. We retained 93% percent 89% last year.

But like I say, there's some seasonality on the QX that goes along with our subscription period. In terms of QB, I mean the difference is very, very slight.

Again, there's a little bit of seasonality around reporting deadlines and folks who might get only briefly downgraded because of timing issues around the timeliness of their reporting and we see some of those companies returning, but overall the upward swing in QB I think is quite marked and quite clear and we're again, Cromwell made the point, we don't like to make wishful thinking type projections, but we're seeing a quarter-over-quarter trend of strong sales and declining churn.

And I guess question three, let's make sure we've answered all the questions. Our QX and QB, as it is the question regarding cost generally.

And I guess -

I was just wondering if there was anything coming up that we should bear in mind that would perhaps impinge on costs through the balance of the year, which is a bit out from what we've seen so far?

Look, I mean we've continued to call out our regulatory obligations under Regulation SCI. Obviously, that has impacted prior quarters and spend in terms of upgrades and enhancements to our security and monitoring and we continue to say that we would expect expenditure going forward to potentially be material in that regard.

I mean I think, look, you can look at the trend quarter-over-quarter for the past five quarters and there is a slight uptick of 2% to 3% on expenses and we'll continue to look at that and be as prudent as we can and control the controllable expenses as any good enterprise will do. But in terms of our regulatory obligation, it's not so easy to determine as we sit here, what we might need to do to make sure that we continue to demonstrate strong compliance.

And offering cost effective products.

And then I guess the third question is to make sure we hit all the notes here was related to the numbers around non-pro users on the market dataset.

I'm sorry, Andrew. What was your question?

So the question really is, obviously, you've seen a very good step up, and I was just wondering whether that reflected earlier moves to increase the distribution, whether we would now look to see more moderate benefit from that as obviously as you've seen a step up already.

Right. I mean certainly we work very hard to expand the reach of our market data and our market data team works really hard and over the course of 2016 added some significant distributors with a good reach into the retail market in particular as well as elsewhere and I think we saw dramatic and impressive results from expanding that distributor network.

We've listed some of those names in our quarterly and several quarterly and a couple of the press releases. So you can see that and I think that it's bearing fruit.

I think we benefit as a general matter from trends around more investor participation, especially in the OTC market. As to forward projections, again, look, we don't like to make those.

You're seeing a flattening out somewhat. I think we saw the big uptick from adding those relationships and we'll continue to find out opportunities where we can to expand the reach of that network in the hope of continuing to deliver growth.

Great. Thank you everyone for calling in.

Thank you very much.