OTC Markets Proposed OTCQX Listing Requirements by Ronald Woessner

OTC Markets Group has published a proposed amendment to the OTCQX Rules for U.S. Companies, and OTCQX Rules for U.S. Banks.

Proposed Amendment

 As of January 1, 2019, OTC Markets Group plans to require all U.S. companies and U.S. Banks trading on OTCQX to provide verified share data through a transfer agent that participates in the Transfer Agent Verified Shares Program. You may find a list of participating transfer agents at Transfer Agent Verified Shares Program.

Background for Proposed Amendment

OTC Markets Group launched the Transfer Agent Verified Shares Program to provide investors with current and reliable share data. The program enables eligible stock transfer agents to report their clients’ share information, including shares authorized and outstanding, to OTC Markets Group on a regular basis via a secure, electronic file transfer.

Share data provided by transfer agents is displayed on www.otcmarkets.com alongside a “Verified by Transfer Agent” logo. OTC Markets Group will use this data to confirm compliance with the OTCQX Rules. This data is also disseminated through OTC Markets Group’s market data feeds and is available to investors and broker-dealers.

OTCQX Rules for U.S. Companies:

  • All U.S. companies shall retain and maintain a transfer agent that participates in the Transfer Agent Verified Shares Program at all times. (see proposed rules OTCQX Rules for U.S. Companies)

 OTCQX Rules for U.S. Banks: 

  • All U.S. Banks shall retain and maintain a transfer agent that participates in the Transfer Agent Verified Shares Program at all times. (see proposed rules OTCQX Rules for U.S. Banks)

 Determine Compliance

 If a company profile on otcmarkets.com displays a “Verified by Transfer Agent” logo, then the company is already compliant with the proposed

  • If there is no logo displayed, but the company’s transfer agent’s name is on the list of participating transfer agents, then the issuer may contact its transfer agent to request that they send the company’s data to OTC Markets
  • If  the company’s transfer agent is not on the list of participating transfer agents or the list of those in the process of onboarding, then the issuer may contact its transfer agent to discuss their plans to participate.  Alternatively,  issuers may also contact Bob Power bob@otcmarkets.com (212) 896- 4406 at OTC Markets Group for further information.

Comments on the proposed rules were originally due OTC Markets Group by October 4, 2018.

Effective Date of Proposed Amendment:

The proposed rules are scheduled to become effective for all OTCQX U.S. companies and OTCQX U.S. Banks on January 1, 2019.

[This is a reprint of an article that appears in the blog ronaldwoessner.com here.]

Mr. Woessner’s bio appears here.

Author: Ron

Ron Woessner of Dallas, Texas is former Senior Counsel to the Financial Services Committee of the US House of Representatives where he was special advisor to the Chairman for capital markets and fintech matters. He founded Microcap Strategies building upon his 25+ years' legal and operational experience in the smaller-cap and startup company ecosphere in the capacity of General Counsel to two NASDAQ-listed companies and CEO of an OTC-traded company that he up-listed to NASDAQ.  Mr. Woessner, a certified Toastmaster, currently lectures and writes on the inhospitability of the US public markets to smaller cap companies and other capital markets topics. His articles are published by equities.com and elsewhere. He also advocates in Washington DC for policies that create a more hospitable public company environment for smaller-cap companies, enhance capital formation, promote entrepreneurship, and increase upward mobility for all Americans, particularly minorities.