OTCQB Initial Requirements
Posted by Laura Anthony, Esq. on August 31, 2016
Effective July 10, 2015, OTC Markets amended its rules related to the OTCQB listing standards to include initial and ongoing listing requirements for companies completing a Regulation A+ offering. This Lawcast series will include a comprehensive overview of the OTCQB requirements as of August 2016.
To be eligible to be quoted on the OTCQB, all companies will be required to:
- Meet a minimum closing bid price on OTC Markets of $.01 for each of the last 30 calendar days;
- In the event that there is no prior public market and a 15c2-11 application has been submitted to FINRA by a market maker, OTC Markets can waive the bid requirement at its sole discretion;
- In the event that a company is a seasoned public issuer that completed a reverse stock split within 6 months prior to applying to the OTCQB, the company must have a post reverse split minimum bid price of $.01 at the close of business on each of the 5 consecutive trading days immediately before applying to the OTCQB;
- In the event the company is moving to the OTCQB from the OTCQX, it must have a minimum closing bid price of $.01 for at least one (1) of the 30 calendar days immediately preceding;
- Companies may not be subject to bankruptcy or reorganization proceedings the company’s application;
- Either be subject to the reporting requirements of the Securities Exchange Act of 1934 and be current in such reporting obligations, be a Tier 2 Regulation A reporting company and be current in such reporting obligations, or, if an international issuer, be eligible to rely on the registration exemption found in Exchange Act Rule 12g-2(b) and be current and compliant in such requirements or be a bank current in its reporting obligations to its bank regulator;
- Not be in bankruptcy or reorganization proceedings;
- Be duly organized, validly existing and in good standing under the laws of each jurisdiction in which it is organized and does business;
- Submit an application and pay an application and annual fee;
- Maintain a current and accurate company profile on the OTC Markets website;
- Use an SEC registered transfer agent and authorize the transfer agent to provide information to OTC Markets about the company’s securities, including but not limited to shares authorized, shares issued and outstanding, and share issuance history; and
- Submit an OTCQB Annual Certification confirming the accuracy of the current company profile and providing information on officers, directors and controlling shareholders.