Our Marketplaces Market 101 Investor Protection
Post# of 15187
(Total Views: 349)
Posted On: 01/06/2018 2:01:22 PM
Our Marketplaces
Market 101
Investor Protection
Reporting Requirements
American Depositary Receipts (ADRs)
How to Get Traded
Caveat Emptor Policy
FINRA & SEC Rules
Whitepapers
FAQs
How to Get Traded
To become an OTCQX, OTCQB or Pink company, at least one broker-dealer must quote the company's securities on OTC Link® ATS. OTC Link® ATS is operated by OTC Link LLC, an SEC-registered Alternative Trading System (ATS) and FINRA member broker-dealer wholly owned by OTC Markets Group. Unlike on stock exchanges, companies do not list their own stock for trading. Rather, broker-dealers begin quoting new securities on OTC Link® ATS by submitting a Form 211 with the Financial Industry Regulatory Authority (FINRA). In some cases, there may be an exemption available that permits a broker-dealer to begin quoting a stock without filing a Form 211. Generally, this happens when the broker-dealer is already quoting the stock on another platform or if the broker-dealer is only representing an unsolicited customer order, not making a market.
Finding a Broker-Dealer to Sponsor Your Company
Only SEC-registered and FINRA-approved broker-dealers (market makers) may quote securities on OTC Link® ATS. Today there are over 130 broker-dealers that use OTC Link® ATS to quote and trade securities. Only one broker-dealer quotation is required to start trading. OTC Markets Group cannot recommend specific broker-dealers. However, broker-dealers included in our 211 Broker-Dealer List welcome potential issuers to contact them to discuss making a market in their company's stock.
Not all broker-dealers are willing to sponsor a new security and file a Form 211. Many broker-dealers will begin to quote a security only after another firm does the paperwork to be quoted on OTC Link® ATS. After 30 days, the newly quoted stock becomes "piggyback qualified," meaning any broker-dealer from that point on can begin quoting it without filing the Form 211 on its own.
Requirements
Current financial information must be submitted with the Form 211. FINRA rules do not require that financial statements are audited, but they should be prepared in accordance with GAAP or, for international companies, in accordance with their home country's accounting standards.
Qualification for higher markets requires additional disclosure from companies:
OTCQX: The OTCQX market is comprised of qualified companies that meet high financial standards, follow best practice corporate governance, demonstrate compliance with U.S. securities laws, and have a professional third-party sponsor introduction. Click here to review reporting requirements for OTCQX companies
OTCQB: The OTCQB market requires that companies are current in their reporting, meet a minimum bid test of $0.01, and undergo an annual verification and management certification process. Companies may not be in bankruptcy. Click here to review OTCQB requirements
Pink: There are no qualifications, disclosure or financial requirements for the Pink market. Pink is a broker-driven market and only requires a broker to file Form 211 to quote a security
Market 101
Investor Protection
Reporting Requirements
American Depositary Receipts (ADRs)
How to Get Traded
Caveat Emptor Policy
FINRA & SEC Rules
Whitepapers
FAQs
How to Get Traded
To become an OTCQX, OTCQB or Pink company, at least one broker-dealer must quote the company's securities on OTC Link® ATS. OTC Link® ATS is operated by OTC Link LLC, an SEC-registered Alternative Trading System (ATS) and FINRA member broker-dealer wholly owned by OTC Markets Group. Unlike on stock exchanges, companies do not list their own stock for trading. Rather, broker-dealers begin quoting new securities on OTC Link® ATS by submitting a Form 211 with the Financial Industry Regulatory Authority (FINRA). In some cases, there may be an exemption available that permits a broker-dealer to begin quoting a stock without filing a Form 211. Generally, this happens when the broker-dealer is already quoting the stock on another platform or if the broker-dealer is only representing an unsolicited customer order, not making a market.
Finding a Broker-Dealer to Sponsor Your Company
Only SEC-registered and FINRA-approved broker-dealers (market makers) may quote securities on OTC Link® ATS. Today there are over 130 broker-dealers that use OTC Link® ATS to quote and trade securities. Only one broker-dealer quotation is required to start trading. OTC Markets Group cannot recommend specific broker-dealers. However, broker-dealers included in our 211 Broker-Dealer List welcome potential issuers to contact them to discuss making a market in their company's stock.
Not all broker-dealers are willing to sponsor a new security and file a Form 211. Many broker-dealers will begin to quote a security only after another firm does the paperwork to be quoted on OTC Link® ATS. After 30 days, the newly quoted stock becomes "piggyback qualified," meaning any broker-dealer from that point on can begin quoting it without filing the Form 211 on its own.
Requirements
Current financial information must be submitted with the Form 211. FINRA rules do not require that financial statements are audited, but they should be prepared in accordance with GAAP or, for international companies, in accordance with their home country's accounting standards.
Qualification for higher markets requires additional disclosure from companies:
OTCQX: The OTCQX market is comprised of qualified companies that meet high financial standards, follow best practice corporate governance, demonstrate compliance with U.S. securities laws, and have a professional third-party sponsor introduction. Click here to review reporting requirements for OTCQX companies
OTCQB: The OTCQB market requires that companies are current in their reporting, meet a minimum bid test of $0.01, and undergo an annual verification and management certification process. Companies may not be in bankruptcy. Click here to review OTCQB requirements
Pink: There are no qualifications, disclosure or financial requirements for the Pink market. Pink is a broker-driven market and only requires a broker to file Form 211 to quote a security
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