Skip to main content

OTCQB -what you need to know


OTC Market Group is American financial market with headquarters in New York City that provides price and liquidity information for almost 10,000 over-the-counter securities. Stating that they recognize that companies come in different shapes, sizes and stages of development so one standard is not suitable for all OTC Market Group has three different market tiers: OTCQX, OTCQB and Pink. Each tier have different standards, reporting requirements and level of disclosure.

Pink market tier is considered the lowest because it doesn't have financial standards or reporting requirement. Stock in Pink tier are not required to be registered with the SEC. Companies have the opportunity to upgrade their status to OTCQB market if they met certain requirements, giving investors most current information possible while reducing the trading limits and restrictions companies may face on the Pink Market.

OTCQB Venture Market, middle tier in OTC Market Group, is for early-stage developing U.S. and international companies. Companies must met one penny ($0.01) bid price requirement. To qualify companies have to be current in their reporting, including information abut company's reporting status and profile, management and board, major shareholders,  transfer agent, law and PR/IR firms. Each company has to be subjected to annual verification and management certification process.

U.S. companies must have financial audited by a PCAOB auditor unless company is Tier 2 Regulation A. Besides the obvious requirement that company is not in bankruptcy it must have at lest 50 beneficial shareholders that own at least round lot of 100 shares. Freely traded public float must be at least 10% of outstanding shares but if a company has public float of 5% and $2 million in market value it can file for exemption or if company has separate class of securities that trade on national exchange.

Inlike securities listed on stock exchanges, securities listed on OTCQX, OTCQB and Pink markets can trade without being registered with SEC but they have to follow one of five reporting standards: SEC, Regulation A, U.S. Bank, International or Alternative reporting standard depending on a company. OTCQB companies that don't report to the SEC, U.S Bank regulators or Qualified Foreign Exchange can follow Alternative report standard. Companies provide current and potential investors with information that help them make sound and informed investment decisions. Providing investors with relevant information help them to have a better understanding of company's business operation and prospects and in the same time improves investors confidence.

Annual fee for OTCQB Market is $12,000 and one-time $2,500 application fee.
Labels:

Comments

Post a Comment

Popular posts from this blog

OTC stocks more difficult to trade and deposit

  Mina Mar Group helps micro-cap companies structure their growth. Micro-capitalized companies are those with less than $50,000,000 in equity, sometimes under $1,000,000. Restructuring involves raising money (both debt and stock), and planning how they will eventually harvest that wealth. If you’re a founder or investor, the secret to harvesting your equity is to possess assets with a developed market for their sale; up until recently, that market was the public market. Now, Over-The-Counter Securities (“OTC Securities”) don’t serve that purpose since, unless you’re a tech unicorn doing an IPO, there are essentially no ways to sell the shares you’ve invested in. OTC securities – how they were deposited five years ago. Brokerages all around the country have tightened compliance over the past five years to the point where no one may deposit share certificates into their brokerage accounts, even if they can prove that they paid for them. Consider the following demand from a secondary ...
Post a Comment
Read more

All-cash, All-stock offer

An acquisition strategy known as an “all-cash, all-stock offer” requires the buyer to commit to purchasing all of the target company’s outstanding shares for a certain amount in cash. It is also characterized as buying all of a company’s outstanding shares from its shareholders in exchange for payment. All-cash, all-stock offers are typically taken into consideration as a strategy to complete an acquisition. This could be an excellent technique the acquiring corporation might use to make the transaction appear sweet and persuade shareholders who are on the fence to accept the sale by offering a premium above the cost at which the shares are now trading. So if it’s that case, if indeed the company was purchased at a premium, then shareholders of the target company could experience an increase in the value of their shares. Even when we talk about cash deals, a stock value for the target firm is discussed, and that value may be considerably higher than its current market price. Therefore,...
Post a Comment
Read more

Company Disclosures

When we speak about disclosures and what they represent in financial terms, that actually refers to providing the public with all relevant information about a company on time.  So relevant information includes facts, figures, dates, procedures, innovation, etc, which means any information regarding a company that can probably impact an investor’s decision. As a result, it is necessary to comprehend that public company directors and officers are in charge of company disclosures and securing investors with complete and valid information. Access to material info enables investors to make information-based investment decisions, which is vital for efficient market pricing and on which state and federal securities are based.  Anytime new stocks are issued to the public, the SEC requisite disclosures of relevant financial and business info to possible investors, with exemptions provided for private placements and small issues. Integrated disclosure structure is the name give...
Post a Comment
Read more