The nature of Over the Counter market and its distinction from Stock Exchange in Iran and the US Legal systems

Although clause 8 of article 1 of the Securities Market Act has been explained Over the Counter market and defined it to ”an electronic or non-electronic market which implements securities transactions on the basis of negotiations”, according to some changes in the rules and regulations of this section, including approval of Iranian Securities Market Act, The law for Development of New Financial Instruments and Institutions, The Fifth Development Plan Act and etc., it has undergone fundamental changes in performance and has gone away from its prevailing concept in countries with developed economy. Iran Fara Bourse Co. has been established on the basis of Securities and Exchange High Council’s license as the sole over the counter market in Iranian Capital Market, the organized structure of this company and procedure of its transactions, which is very similar to stock exchange, practically have led to a distancing of the Fara Bourse from the concept of OTC. This has led to the exclusion of Iranian Capital Market from benefits of OTC market, with significant legal defects. However, in US law, OTC market is completely different from the stock exchange from the variety of aspects, including how transactions are carried out, tax breaks, fees, and transaction brokers, thereby provides diverse investment opportunities for Capital market activists.