New rule proposals provide a roadmap to the public markets for small companies seeking to raise capital under new SEC Regulation A+
NEW YORK – June 12, 2015 – OTC Markets Group Inc. (###otcqx: OTCM), operator of Open, Transparent and Connected financial marketplaces for 10,000 U.S. and global securities, today announced it has published proposed new rules and standards for companies seeking to use newly adopted “Regulation A+,” a provision of the Jumpstart Our Business Startups (JOBS) Act, to go public and have their securities traded on the OTCQX® Best and #otcqb® Venture Marketplaces.
The newly proposed OTCQX and OTCQB rules, which were posted this week to www.otcmarkets.com, are designed to support informed and efficient secondary trading for Regulation A+ securities. These rules define the initial and ongoing financial reporting obligations for U.S. companies raising capital under Regulation A+ to have their securities publicly traded on OTCQX and OTCQB, the top tiers of the U.S. unlisted market, and will provide a roadmap for Regulation A+ companies that are committed to providing a transparent and trusted public trading market for their investors. Issuers, advisors and other marketplace participants will have 30 days to comment on the proposed changes before they go into effect.
“Our premium OTCQX Best and OTCQB Venture marketplaces provide an ideal platform for Reg. A+ companies as they offer the trading, transparency and trust of a well-regulated public market with a broker-driven, electronic network-based model that is more suited to the needs of smaller issuers and their investors,” said R. Cromwell Coulson, President and CEO of OTC Markets Group. “Companies that raise capital under Reg. A+ will benefit from our SEC regulated ATS trading platform to build visibility for their companies, provide liquidity to their investors, broaden their shareholder base and build a robust, transparent public market for their investors as they grow and mature their businesses.
“We look forward to welcoming more new companies to our markets under Reg. A+, which will further expand the universe of opportunities available to investors,” continued Coulson.
OTCQX and OTCQB Regulation A+ Eligibility Requirements
The OTCQX Best Marketplace offers informed and efficient trading for established, investor-focused U.S. and international companies. Under the proposed new OTCQX rules, a company may use its required disclosure under Regulation A+ Tier 2 to help meet its initial and ongoing disclosure requirements. In addition to required Regulation A+ disclosure, an OTCQX company must file quarterly financial reports, make timely disclosures of material news events and meet a PCAOB audit standard on an ongoing basis. Canadian companies raising capital under Regulation A+ must be listed on a qualified foreign stock exchange such as the Toronto Stock Exchange to qualify for OTCQX.
There are more than 350 companies traded on the OTCQX marketplace, representing an aggregate $1.4 trillion in market capitalization. These top tier companies range from global, blue-chip leaders like Adidas, Heineken, Roche and Volkswagen to investor-focused U.S. community banks to established and growing U.S. and international companies.
The OTCQB Venture Marketplace offers transparent trading for entrepreneurial and development stage U.S. and international companies. Under the proposed new OTCQB standards, a company that meets the existing OTCQB eligibility criteria can use its required Regulation A+ Tier 2 reporting to fully meet its initial and ongoing OTCQB disclosure requirements. Canadian companies raising capital under Regulation A+ must be listed on a qualified foreign stock exchange such as the TSX Venture Exchange to qualify for OTCQB.
More than 900 companies are traded on the OTCQB marketplace, representing a combined $73.1 billion in market capitalization.
For details about OTC Markets Group’s OTCQX rule proposals, visithttp://www.otcmarkets.com/content/doc/qx/Rules/Release/9.pdf
For details about OTC Markets Group’s OTCQB rule proposals, visithttp://www.otcmarkets.com/content/doc/OTCQB/release2.pdf.
About OTC Markets Group Inc.
OTC Markets Group Inc. (OTCQX: OTCM) operates Open, Transparent and Connected financial marketplaces for 10,000 U.S. and global securities. Through our OTC Link® ATS, we directly link a diverse network of broker-dealers that provide liquidity and execution services for a wide spectrum of securities. We organize these securities into marketplaces to inform investors of opportunities and risks: the OTCQX® Best Marketplace; the OTCQB® Venture Marketplace; and the OTC Pink® Open Marketplace. Our data-driven platform enables investors to easily trade through the broker of their choice at the best possible price and empowers a broad range of companies to improve the quality and availability of information for their investors. To learn more about how we create better informed and more efficient financial marketplaces, visit www.otcmarkets.com.
OTC Link ATS is operated by OTC Link LLC, member FINRA/SIPC and SEC regulated ATS.