What are Yellow Sheets?

Produced since the early years of the 20th century, yellow sheets help to provide a daily flow of information regarding the status of quotes on corporate bonds to brokerage houses in the United States. Originally the brainchild of the National Quotation Bureau, yellow sheets are still produced today by the revamped NQB organization, which is known today as Pink Sheets, LLC.

The value of the yellow sheets become apparent when it is understood that most bonds issued by corporations are traded in the over the counter market. However, not all bonds that are in circulation meet the basic standards that are necessary for listing on the NASDAQ National Market or the NASDAQ Small-Cap Market. The yellow sheets help to provide daily updates about those bond opportunities that don’t appear on NASDAQ. Thus, the yellow sheets allow brokerages to keep clients informed of a wider range of investment options, which in turn increases the chances that investors will give these corporate bonds due consideration.

Yellow sheets were so named for one simple reason. Back in 1904, the National Quotation Bureau came up with the concept of providing information on both stocks and bonds that was not easily obtained from another source. In order to keep the process simple, it was determined to color code the communications sent out to brokerages that subscribed to the service. For stocks, the decision was made to print the information on sheets of pink paper. Information about bonds would be distributed on yellow paper.

Today, hard copies of the yellow sheets are still distributed to subscribers who prefer that medium. However, it is now possible to receive yellow sheets in electronic form, either as an HTML formatted email or as a link to the web site of the former National Quotation Bureau. The modern day Pink Sheets, LLC also allows subscribers to access the data via their web site directly. As in years past, the yellow sheets are updated on a daily basis, continuing to allow investors and brokers to learn about investment opportunities that would be difficult to locate through other means.