Dealings of securities increasing out of Tehran Stock Exchange in recent years, ever increasing number of the public corporations as well as lack of proper and adequate infrastructure in the capital market has made it inevitable to provide the necessary mechanism for the dealing of such securities as well as formulating the respective rules and regulations. In this respect we try to touch the above problem and introduce one of the most effective mechanisms of capital market which known as “Over – The – Counter (OTC)” securities market and designing it in Iran capital market.

OTC securities market is a mean for dealing the securities which can not be listed by the state exchange. This market is not restricted to a specific and limited place and its main factor of success is its wide use of information technology. The broker and dealers are directly linked together and to their customers through a computer and communications network in such market and the prices are determined in negotiation process. This has caused the OTC to stand as an efficient and solid market and the transparency of information has brought about the confidence of the investors.

At last the importance of creation of the OTC in Iran has been analyzed and the main restrictions and problems for developing such a market has been discussed and the developed and Islamic countries experiences are used for designing this market in Iran.

Over – the – counter securities markets (OTC), National association securities dealers (NASD), NASD’S automated quotation system (NASDAQ), Dealer, Broker, Market maker