A surge in delistings on major U.S. stock exchanges is fueling new business for a small market positioned between the over-the-counter Pink Sheets and major listings venues.

The OTCQX platform is pitched as the upper tier of the Pink Sheets, and has also attracted overseas companies that see cross-listing on a U.S. exchange as too expensive, according to R. Cromwell Coulson, chief executive of Pink OTC Markets Inc.

The platform targets retail investors, hedge funds and investment advisers, and listings have climbed to 66 from 36 at the end of last year with the addition this week of Datatrak International Inc., a $4.5 million technology services company.

While some OTCQX-listed companies delisted by choice from NYSE Euronext (NYX) or Nasdaq OMX Group Inc. (NDAQ), others saw their exchange listings revokedafter falling below minimum size thresholds.

"If you look at [those] exchanges as being Yale and Harvard, they're great schools, but not everybody goes there," Coulson said. "Either you can't get in, or can't afford it, but there are lots of other fine schools."

OTCQX is operated by Pink OTC Markets, which also runs the Pink Sheets, and provides online quoting and an electronic trading platform for brokers that deal in these securities. The latter market is home to around 5,000 companies, some fallen on hard times and others with questionable histories.

Launched in 2007, the OTCQX serves to highlight the cream of the Pinks - reputable companies that want to maintain visibility in the U.S. market without the responsibility of full Sarbanes-Oxley Act compliance or the price tag that comes with a Nasdaq OMX or NYSE listing.

The privately held company makes most of its revenue from trading fees for broker-dealers and market data, according to Coulson, the biggest shareholder.

Some companies on OTCQX upgraded from the Pink Sheets, or are non-U.S. concerns that view the platform as their path to an exchange listing. In May, Brazilian beef producer JBS S.A. signed on with an eye toward a spot on the New York Stock Exchange, according to Coulson.

OTCQX-listed U.S. companies are required to either provide disclosure through the Securities and Exchange Commission or comply with the platform's Alternative Reporting Standard, similar to SEC standards minus the Sarbanes-Oxley 404 audit.

International companies cross-listing on the platform must be exempt from SEC rule 12g3-2(b), posting the financial disclosures required by their home country's exchange.

Delistings on U.S. exchanges have jumped with the financial crisis. Through mid-July, 72 companies had been kicked off Nasdaq OMX markets for falling below minimum bid price and market cap requirements, with NYSE Euronext shedding 24 names.

Last year, Nasdaq OMX saw 85 companies delisted, and NYSE Euronext nearly 50 - its highest level in five years.

In an economy still grappling with a deep recession, Coulson expects to see more companies exit their U.S. exchange listings, bringing more potential listings for OTCQX.

But despite the tough environment, exchanges don't see the OTCQX cutting into potential business.

"This platform serves a purpose for a particular type of company in a particular type of market, but it's not a competitive threat," said a spokesman for NYSE Euronext.

-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com