Companies currently traded on the OTCQB have 120 days after their fiscal year end (FYE) to meet the marketplace’s new standards. Failure to meet the deadline results in a downgrade to the OTC Pink open marketplace.
Companies with an FYE of March 31, 2014, were the first group of OTCQB companies subject to the new requirements, which took effect earlier this year. The rollout will be completed on July 30, 2015, the compliance deadline for the last group of companies currently traded on OTCQB with a FYE of March 30, 2015.
As of the end of December, SEC-reporting companies whose FY ends September 30, 2014, have just around five weeks to complete the verification process. It’s a simple process, says OTC Markets, but one that can take several weeks.
Here’s what it takes to get the process started, per OTC Markets:
Step 1: Determine Eligibility
a) Meet the minimum ($0.01) bid price test
b) Must be SEC Reporting, Bank Reporting, or listed on a Qualified Foreign Exchange
c) Must not be in bankruptcy
Step 2: Submit an OTCQB Application and Agreement
Step 3: Provide the following information through OTCIQ.com: Once the application is submitted, the OTC Corporate Services team will activate your OTCIQ.com account
a) Must be current in all periodic reporting requirements on EDGAR
b) Verify basic information on your company and your company’s security
c) Post an Initial OTCQB Certificationon your company
Step 4: Submit the OTCQB annual fee
The OTCQB is an attractive listing for companies that do not yet qualify for listing on OTCQX. Benefits of trading on the OTCQB, per OTC Markets:
- Minimum bid price test of $0.01 will remove companies that are most likely to be the subject of dilutive stock fraud schemes and promotion
- Improved investor confidence through verified information, confirming the Company Profile displayed on www.otcmarkets.com is current and complete and providing additional information on officers, directors, and controlling shareholders
- Greater information availability for investors through the OTC Disclosure & News Service
- Transparent prices for investors through full-depth of book with Real Time Level 2 quotes.
For more information on the application process visit: http://www.otcmarkets.com/content/doc/otcqb-application-guide.pdf
For more information on OTC Markets visit: www.otcmarkets.com
