Which type of securities trade on the OTC market but do not meet NASDAQ requirements?

The type of securities that trade on the over-the-counter (OTC) market but do not meet the stringent requirements of NASDAQ is designated as Non-NASDAQ OTC securities. These securities represent companies that may not have the financial standards, operational history, or transparency required to be listed on major exchanges like NASDAQ.

Non-NASDAQ OTC securities can include smaller companies or those that are in the developmental stages and may not disclose as much information as larger, more established firms. Thus, they provide an alternative for investors seeking access to a broader range of investment options beyond what is available in the more regulated environments of formal exchanges. This trading environment offers flexibility but often comes with higher risks, due to the lack of regulatory oversight, which is why these securities are specifically categorized this way.

The other types listed, such as NASDAQ listed securities, exchange-traded funds, and classified securities, either represent investments that are already on more regulated exchanges or do not fit the description of trading on the OTC market without the qualities needed for NASDAQ listing.