In light of a number of recent inquiries from foreign companies seeking to have their securities traded in the U.S. but not have to be fully-reporting SEC companies with the related obligations, liabilities and perhaps most important costs, we now begin a series of blogs concerning how qualified “Foreign Private Issuers” may have their securities traded on the highest tier OTC Market, OTCQX International, without becoming fully reporting SEC companies under our PAL sponsorship.
We note also that foreign private issuers that are U.S. reporting companies may be able to cease their reporting obligations and still trade on the OTCQX International, but more in this in later blogs.
According to OTC Markets:
Maximizing Visibility with U.S. Investors
Companies use OTCQX to expand their access to investors, engage them with quality disclosure, and provide market transparency to stimulate liquidity.
OTCQX Markets believes that investors are attracted to companies that have met clear quantitative standards and provide quality disclosure. OTCQX offers global exchange listed companies an entry to the U.S. public markets, without the duplicative regulatory costs required of listing on a traditional U.S. exchange. The quality-controlled admission process for OTCQX companies signals to investors companies focused on valuation and transparency.
Who Should Join OTCQX?
Reserved for global companies listed on a qualified stock exchange in their home country, OTCQX International provides a U.S. marketplace for a company’s investors and a platform to efficiently expand their U.S. shareholder base. OTCQX companies are required to have a Level 1 Sponsored ADR program in the U.S. or a foreign ordinary that is DTC eligible (such as Canadian companies). This requirement ensures that only those companies which have already complied with a qualified foreign stock exchange’s reporting are eligible.
All OTCQX International companies appoint a qualified, third-party Principal American Liaison (PAL) sponsor to guide the admission process, to post disclosure in English and to be a resource regarding all aspects of investor relations and U.S. market protocols. These advisors, in turn, signify that OTCQX companies are providing quality disclosure and have trusted management teams.
This is where we come in. Our law firm, as a qualified PAL, will sponsor your listing in accordance with OTCQX requirements and act as you guide and liason to becoming a listed, traded company on the OTCQX market.
Why Investors Prefer OTCQX
The OTC Markets believes that OTCQX separates out the credible companies from companies that are economically distressed or questionable in the OTC space. Companies that join OTCQX demonstrate their commitment to providing superior information to investors and maintaining the highest financial standards.
Investors can access market data and trade OTCQX securities through any broker of their choice, including E*TRADE, Fidelity, Schwab, Scottrade, and TD Ameritrade. Trades are executed, settled and cleared in the U.S. in a manner similar to that for a stock on NASDAQ or NYSE, and trade reports are disseminated through Yahoo!, Bloomberg, Reuters, and most other financial data providers.
We note this is quite important as more and more investors are finding it difficult to get their securities deposited with on-line brokers such as E*TRADE, Fidelity, Schwab, Scottrade, and TD Ameritrade. This problem disappears under our PAL program.
In addition, all investors can view a full Real-Time Level 2 Quote Montage for all OTCQX companies on www.otcqx.com, allowing them the opportunity to see the full market-depth of their stock.
Services to Issuers
OTCQX provides services to companies which enable them to communicate with and engage their investors, while providing transparent trading and easy access to company information. Streamlined disclosure requirements allow OTCQX International companies to make their home country financial reporting publicly available on OTC Markets Group’s websites for easy access by U.S. investors. OTCQX International is the only highly visible electronic trading venue in the U.S. that accepts home country disclosure for global exchange listed companies.
- OTC Disclosure & News Service: Distribute your company’s news, research, and financial reports so investors can analyze your company. Company information is published on the OTC Markets Group’s websites; fundamental data is distributed by Edgar Online to financial sites and portals such as Yahoo! Finance; companies can disseminate company news and information through the OTC Disclosure & News Service onOTCIQ.com, as well as through PR Newswire’s expansive network, which includes local, national and Reg. FD compliant news portals.
- Real-Time Level 2 Quote Display Service: Sponsor Level 2 Quotes for your stock so investors can have free access to the same market data professional traders have. Broker-Dealer identifiers, bid and ask prices, and time & sales data delivered to investors onwww.otcmarkets.com and on your corporate IR site – all in real-time.
- Blue Sky Monitoring Service: Receive an initial audit and ongoing monitoring of your company’s compliance with state blue sky laws so brokers and financial advisors can provide investors with professional advice about your company’s stock. We will also assist in assuring your Blue Sky qualifications in the U.S.
We encourage you to stay tuned to our Blog and our LinkedIn posts in the coming weeks as we give you more detail in this process. We are also interested in establishing strategic relationships within the confines of Florida Bar Rules governing attorney conduct with consultants in foreign countries to help us work with foreign companies that may want to take advantage of this exciting program.
If you are a foreign company interested in this program, or if you are a consultant to foreign companies looking for qualified U.S. SEC counsel, please contact us for more information.