Some more info:
International Company Access to U.S. Capital Markets
On Which U.S. Capital Market Should You Seek Your Listing?
You have seven U.S. capital markets on which you can seek your listing. They are:
- OTC Markets
- OTCQX
- OTCQB
- OTC Pink.
- OTC Bulletin Board
- NASDAQ OMX Group
- NASDAQ Global Select Market
- NASDAQ Global Market
- NASDAQ National Market
- NYSE Euronext
- NYSE Amex Equities
- NYSE
The Pink Sheets and OTC Bulletin Board are called non-listed markets. The remaining five markets are called listed markets.
What is the difference between a non-listed and a listed trading market?
Listed trading markets including NASDAQ and the registered exchanges, such as NYSE or NYSE AMEX Equities have specific listing and maintenance standards, which are stringently monitored and enforced. Companies listed on a stock market have reporting obligations not just to the SEC but also to the market itself. Companies trading on a listed market have on-going regulatory relationship with the market itself. OTC quotation services including OTCBB, Pink Sheets merely facilitate quotation of unlisted securities.
Your stock is technically not “listed” in the OTCBB or any of the three OTC Markets. Your stock is merely “qualified for quotation.”
What does this mean?
You can only start your journey to a listed market if you are a company with significant revenues and profits and you meet all of the other stringent requirements to trade on a listed market.
If you an earlier stage company, your journey will start on the Pink Sheet or OTC Bulletin Board.
How do you choose between the OTC Bulletin Board and the OTC Markets?
Both the Bulletin Board and the Pink Sheet show quotations and facilitate trading in OTC securities, which in general mean securities that are not listed or traded on NASDAQ or a national securities exchange such as NYSE AMEX Equities or the NYSE. However, there are significant differences in the two.
OTC Bulletin Board
The OTCBB is displays real-time bid and ask price quotations, last-sale prices, and volume information in OTC equity securities.
The OTCBB is a quotation medium for subscribing members, not an issuer listing service, unlike NASDAQ or a national securities exchange such as AMEX or the NYSE.
There are no minimum standards such as price, number of shareholders, independent directors, corporate governance requirements and the like.
SEC and FINRA rules limit quotations on the OTCBB to the securities of companies that are required to file reports with the SEC under the 1934 “Filing Reports” Act and that are current in their reports filed with the SEC.
Issuers do not have any filing or reporting requirements with The NASDAQ Stock Market, Inc., or FINRA.
NASDAQ has no business relationship with the issuers of securities quoted on the OTCBB.
Investors must contact a broker/dealer to trade OTCBB securities. Investors do not have direct access to the OTCBB service. The OTCBB provides access to more than 3,300 securities and includes more than 230 participating Market Makers.
OTCQB
The OTCQB Market is essentially the same as the OTC Bulletin Board, just run by a separate corporation.
OTCQX
The OTCQX Market has the same requirements as the OTCQB and the OTC Bulletin Board, plus the following requirements:
- Ongoing operations (no shells, blank check or special purpose acquisition companies);
- A minimum bid price of $0.10 (for preceding 90 business days);
- The company may not be subject to any bankruptcy or reorganization proceedings;
- The company must be duly organized, validly existing and in good standing under the laws of each jurisdiction in which the company is organized;
- At least 50 beneficial shareholders, each owning at least 100 shares of the Company’s common stock;
- Ongoing quarterly and audited annual financial reports posted on OTCQX.com, a premier website for qualifying companies (SEC Registered issuers can use EDGAR); and
- Inclusion in the Standard & Poor’s Corporation Records or Mergent Manuals (fka Moody’s Manuals), which satisfies the Blue Sky requirements for secondary transactions in many states, together with a list of any other states in which the security is Blue Sky compliant and eligible to be sold by brokers in those states;
- DAD Letter of Introduction upon application process completion and quarterly and annually thereafter to OTC Markets Group Inc. confirming that the issuer has made adequate current information publicly available and meets the tier inclusion requirements.
OTC Pink Sheets
The Pink Sheets is a centralized quotation service that collects and publishes market maker quotes for OTC securities in real-time. Pink Sheets is neither an SEC Registered Stock Exchange nor a Broker-Dealer.
What is the primary difference?
Pink Sheets and the OTCBB are competing quotation services for OTC securities. Both are privately owned, but by different corporations.
The primary difference between the OTCBB/OTCQB/OTCQX and the OTC Pink Markets is that to be quoted on the OTCBB/OTCQB/OTCQX, a company must be required to file reports with the SEC under the 1934 “Filing Reports” Act and be current in its reports filed with the SEC. Pink Sheet companies do not have to be SEC reporting companies, although some are.
The Next Step: Moving Up to a Higher Market
Perhaps you can accomplish your goals by remaining on the Pink Sheets or OTCBB/OTCQB/OTCQX. But if you can’t, you will need to move up to a higher market.
What are the primary higher markets?
NASDAQ OMX Group
The NASDAQ markets are owned by a public company named NASDAQ OMX Group, Inc. It is the world’s largest exchange company. It delivers trading, exchange technology and public company services across six continents, with over 3,800 listed companies. It offers trading across multiple asset classes including equities, derivatives, debt, commodities, structured products and exchange-traded funds. NASDAQ originally stood for National Association of Securities Dealers Automated Quotations.
NASDAQ was founded in 1971 as a wholly-owned subsidiary of the Financial Industry Regulatory Authority, or FINRA (then known as the National Association of Securities Dealers, Inc.). Beginning in 2000, FINRA restructured and broadened ownership in NASDAQ by selling shares to FINRA members, investment companies and issuers listed on The NASDAQ Stock Market.
In connection with this restructuring, NASDAQ applied to the SEC to register The NASDAQ Stock Market as a national securities exchange. Prior to operating as an exchange, The NASDAQ Stock Market operated under an SEC-approved plan that provided a delegation of legal authority from FINRA to The NASDAQ Stock Market to operate as a stock market. FINRA fully divested its ownership of NASDAQ in 2006, and The NASDAQ Stock Market became fully operational as an independent registered national securities exchange in 2007.
In 2006, NASDAQ also reorganized its operations into a holding company structure. As a result, our exchange licenses and exchange and broker-dealer operations are held by its subsidiaries.
On February 27, 2008, NASDAQ and OMX AB combined their businesses and NASDAQ was renamed The NASDAQ OMX Group, Inc. Prior to the combination, OMX AB owned and operated the largest securities marketplace in Northern Europe.
NASDAQ BX Venture Market
NASDAQ has just introduced a new market in May 2011 for Smaller Reporting Companies called the NASDAQ Venture Market.
It is for companies with a strong business concept and market potential but because they do not fulfill the required financial requirements to list on a national securities exchange. Its listing requirements that are targeted to smaller and earlier stage companies.
While the BX Venture Market has lower financial listing standards than the major national securities exchanges, the corporate governance requirements are similar to those required for listing on them. The BX Venture Market provides a well regulated, transparent platform for companies to gain additional visibility in the investment community. Further, companies and their shareholders will benefit from superior trading technology, as well as a robust portfolio of products and services.
