Ongoing Responsibilities on the OTCQX Market


March 18th, 2015 by Laura Anthony, Esq.

Ongoing Responsibilities on the OTCQX Market

OTCQX Issuers have an ongoing responsibility to:

  • Comply with all OTCQX rules including disclosure requirements
  • Comply with state and federal securities laws and they must cooperate with any securities regulators, including self-regulatory organizations such as FINRA
  • Companies must either properly qualify for a blue sky manual exemption or be subject to and current in their Exchange Act reporting requirements
  • Comply with all DAD and PAL requirements including providing information to their DAD or PAL and notifying OTC Markets of their resignation and why and of a replacement
  • Pay the annual fee
  • Provide notice of certain actions or changes such as affiliate transactions; corporate action changes, auditor changes, DAD/PAL changes and resignations
  • Distribute and publish the company’s annual meeting proxy materials
  • Use the services of an SEC registered transfer agent
  • Maintain GAAP financial statements
  • Maintain a current and accurate profile page on OTC Markets
  • Respond to OTC Markets comments and amend filings as necessary in response thereto
  • Maintain Ongoing Disclosure Obligations – (i) Companies subject to the Exchange Act reporting requirements must remain current in such reports or for International companies, maintain qualification under Exchange Act Rule 12g3-2(b); (ii) Companies not subject to the Exchange Act reporting requirements must maintain current information on OTC Markets; (iii) quickly release disclosure of material news and recent developments, whether positive or negative, through a press release on the OTC Markets website; (iv) an OTCQX Company must also act promptly to dispel unfounded rumors which result in unusual market activity or price variations
  • OTCQX imposes integrity requirements as well – Companies are expected to act professionally and uphold the OTC Markets standards for “high quality”; and to release news and reports that are prepared factually and accurately with neither excessive puffery or conservatism; companies must not report or act in a way that could be misleading; must not inundate with non-material releases; and must not make misleading premature announcements
  • Meet the price quotation minimum of $.10 or $1.00 for premier companies, subject to a 180 day grace period of the price falls below the minimum
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