OTC Markets Newsletter
OTC Markets News March 2014

OTC Markets Group Introduces Timely Disclosure Requirements

One of the hallmarks of every leading stock market around the world is the requirement that issuers make timely disclosure of material news developments to investors. As the New York Stock Exchange (“NYSE”) states in Rule 202.05 of its Listed Company Manual, timely disclosure of material news is “one of the most important and fundamental purposes of the listing agreement which the company enters into with the Exchange.” This rule has stood the test of time, even though NYSE companies are generally required to file a Form 8K with the SEC within four days after a material event.

The timely publication of material information is essential to the proper functioning of our capital markets, as it ensures investors have timely, convenient and equal access to information that can impact their investment decisions. It promotes efficient price formation, as a company’s share price can reflect all publicly available information. And it helps companies demonstrate credibility with investors by publishing important news on a timely basis. In short, timely disclosure standards are a necessity for efficient and informed markets.

To align OTCQX, our best marketplace, with the standards of the world’s most respected stock exchanges, this month OTC Markets Group introduced a new timely news disclosure requirement for U.S. companies* on OTCQX. As part of the OTCQX U.S. ongoing reporting obligations, companies will be required to “release quickly to the public any news or information which might reasonably be expected to materially affect the market for its securities.”

Click to read more.

Material news announcements include annual and quarterly earnings, dividend announcements, mergers and acquisitions, tender offers, stock splits and major management changes, as well as any other “substantive items” such as major product announcements, contract awards, expansion plans, and discoveries. Unfavorable or negative news that is material should be disclosed as well.

Companies can meet the new OTCQX timely disclosure requirements and other disclosure obligations by publishing news through our OTC Disclosure & News Service, which distributes information directly to market participants and broker-dealers trading in their stock.

Technology Integration to Streamline Wide Distribution of News Releases

We have developed solutions to make it seamless for U.S. companies to make timely disclosure and for global companies to consistently release their home country disclosure to U.S. investors. The integration of our OTC Disclosure & News Service with major news distribution providers, GlobeNewswire, Marketwired and PR Newswire (with more newswires planned), enables OTCQX companies to concurrently distribute press releases to market participants, as well as to the financial markets and the news media. SEC reporting companies may also file Form 8Ks with the SEC via PR Newswire at the same time that news releases are published.

Transparency and Technology to Build Better Trusted Markets

Our new rules and integrated technology solutions for timely and consistent disclosure of material news not only enhance the standards of the OTCQX marketplace, but they also further distinguish the integrity of OTCQX companies as those that support informed, efficient and investor-friendly public trading.

For the complete text of the new requirement, visit pages 13 and 14 of the OTCQX Rules for U.S. Companies here.

Click to close.

*International companies on OTCQX are not subject to the new OTCQX timely disclosure requirements because they are already required to meet disclosure requirements in their primary exchange listing and to publish their home country disclosure in English in the U.S. under SEC Exchange Act Rule 12g3-2(b).


Changes to the OTCQX and OTCQB Marketplaces

This year, we are making significant changes to our OTCQX and OTCQB marketplaces to provide companies and investors with better information and a better trading experience. Please see a summary of the changes below.

New OTCQX Rules for U.S. Reporting Companies:

•   The third-party sponsorship (DAD) process for U.S. companies was streamlined, making it less burdensome for U.S. companies to join OTCQX
•   U.S. companies are now required to immediately post material news to the public
•   Companies are no longer required to be DTC eligible to qualify for OTCQX
•   Learn more here

Introduction of OTCQX Banks:

•   Launching this spring, OTCQX Banks is the first public marketplace in the U.S. uniquely designed for community and regional banks
•   Provides a public marketplace for established, well-managed banks to build greater visibility and to receive capital market support
•   Banks can leverage their existing regulatory reporting to qualify
•   Banks appoint a Corporate Broker, a bank specialist who provides guidance about how to more effectively reach and inform investors, and expand a stock’s liquidity
•   Learn more here

Changes to OTCQB to Make it a Better Venture Stage Marketplace:

•   Companies will be required to meet new eligibility standards, including a minimum bid price of $.01, and will be required to undergo an annual verification and management certification process
•   OTCQB will include Real-Time Level 2 quotes and the OTC Disclosure & News Service to help companies improve the information experience for their investors
•   The first group of current OTCQB companies subject to the new requirements include those with a Fiscal Year End of March 31, 2014 and will be required to comply with the new OTCQB standards by July 31, 2014
•   Venture stage international companies will be able to join OTCQB for the first time
•   Learn more here

Light Up The Market

Follow us on Twitter at @OTCMarkets to keep up with OTCQX companies Lighting Up Their Market


Cortex Business Solutions (OTCQX: CTPNF) Lights Up the Market to celebrate joining OTCQX!   George Toulantas (right), Director of Investor Relations at Heineken N.V. (OTCQX: HEINY), recently visited the OTCQX Market Center. Joined by OTCM CEO Cromwell Coulson, Mr. Toulantas Lights Up the Market!

Monthly Trade Summary

March 2014

Marketplace Designations # of Securities Monthly Dollar Volume Monthly Dollar Volume
per Security
YTD $ Volume Aggregate Market Capitalization
(in Millions)*
OTCQX® 334 $3,388,595,507 $10,145,496 $10,559,631,469 $1,613,610
OTCQB® 3,185 $12,556,326,266 $3,942,332 $27,662,128,090 $260,839
OTC Pink® Current Information 3,285 $10,930,726,944 $3,327,466 $31,979,850,531 $12,484,958
OTC Pink Limited Information 356 $329,440,986 $925,396 $796,253,027 $7,572
OTC Pink No Information 2,697 $1,351,415,836 $501,081 $4,345,502,016 $57,509
Totals 9,857 $28,556,505,539 $2,897,079 $75,343,365,134 $14,424,489
*Data as of March 31, 2014

February 2014

Marketplace Designations # of Securities Monthly Dollar Volume Monthly Dollar Volume
per Security
YTD $ Volume Aggregate Market Capitalization
(in Millions)*
OTCQX® 337 $3,632,789,430 $10,779,791 $7,171,035,962 $1,618,718
OTCQB® 3,174 $8,259,471,801 $2,602,228 $15,105,801,824 $246,832
OTC Pink® Current Information 3,175 $9,990,481,788 $3,146,608 $21,049,123,587 $12,320,965
OTC Pink Limited Information 384 $314,735,915 $819,625 $466,812,041 $7,415
OTC Pink No Information 2,762 $1,649,050,219 $597,049 $2,994,086,180 $56,331
Totals 9,832 $23,846,529,155 $2,425,400 $46,786,859,595 $14,250,260
* Data as of February 28, 2014
Fact of the Month

In February, ADRs on OTCQX comprised 8% of the 1,500+ ADRs trading on our three marketplaces while accounting for 31% of total ADR dollar volume traded.


Newsletter Sponsors
Continental Stock Transfer & Trust First American Stock Transfer, Inc.
Events & Sponsorships

OTC Markets Group has attended or will attend the following events to educate investors, broker-dealers, and OTCQX, OTCQB and OTC Pink companies about our marketplaces.

Growth Capital Expo 2014 (April 29-May 1, 2014)

Forum on OTCQX and OTCQB Marketplace Changes - NYC & LA (April 16 & May 6, 2014)

15th Annual Depositary Receipt Issuers' Conference, Emerging Europe, Middle East & Africa (April 10-13, 2014)

STANY 78th Annual Conference & Dinner (April 10, 2014)

ISEEE Spring 2014 Meeting (April 6-10, 2014)

ACA Summit (March 26-28, 2014)

JOBS Act Regulation A+: The New Public Offering (March 19, 2014)

Contact us if you are interested in meeting us at one of these events.

US Over-Counter Trading Tightens Reporting, Other Standards - Reuters (March 27, 2014)

SecondMarket Seeks to Open Bitcoin Fund to Ordinary Investors - The Wall Street Journal (March 20, 2014)

Bugatti-Driving 26-Year-Old Tied to Penny-Stock Website - BusinessWeek.com (March 17, 2014)

Taking Stock; banking: Local lenders wait and weigh value of joining new over-the-counter market specifically for banks - Los Angeles Business Journal (March 17, 2014) (subscription required)

OTC Markets Group Approves McAdams Wright Ragen as Corporate Broker for OTCQX Banks - press release (March 12, 2014)

NYSE, Nasdaq Join to Push for Trading Rule - The Wall Street Journal (March 11, 2014)

OTC Markets Group Congratulates Bio-Path Holdings on NASDAQ Listing - press release (March 10, 2014)

OTC Markets Group Announces Fourth Quarter and Fiscal Year 2013 Financial Results - press release (March 5, 2014)

OTC Markets Group Announces Quarterly Cash Dividend - press release (March 3, 2014)

Comments on Proposed Changes to Regulation A

In December, the SEC released proposed rules to expand Regulation A, mandated by Title IV of the JOBS Act, to increase access to capital for smaller companies. We recommend public companies and their advisors submit comments to the SEC, as the input of the smaller and growth company community is needed for the SEC to pass effective final rules for Regulation A, including expanding offering size, making Regulation A shares free trading, streamlined filings and preemption from state Blue Sky laws for initial offerings and secondary trading. OTC Markets Group’s comment letter to the SEC regarding the proposed rules can be found here.

Introducing the OTC Compliance Data File
Market Data Updates

The OTC Compliance Data File provides broker-dealers and compliance/risk mitigation teams with important data points on 10,000 U.S. and global securities on the OTCQX, OTCQB, and OTC Pink marketplaces. The OTC Compliance Data File, delivered daily in pipe-delimited format, provides details on key compliance data points, including Penny Stock, bankruptcy, shell, and caveat emptor status, as well as marketplace designations. This file was created to help broker-dealers and financial institutions more efficiently analyze and monitor OTCQX, OTCQB, and OTC Pink securities trading in an automated manner.

Key Benefits

•   Simplifies the process of identifying securities that are compliant under the SEC Penny Stock Rule and FINRA’s OTC Recommendation rule
•   Expands the breadth of securities that broker-dealers can recommend to investors under FINRA Rule 2114
•   Reduces risks and streamlines trading for investors and broker-dealers by reducing paperwork and eliminating extraneous processes

To learn more, please contact Market Data Services at 212.220.2166 or marketdata@otcmarkets.com.

adr.com, a leading site on depositary receipts managed by J.P. Morgan, now displays the correct marketplace designations for 1,500 OTCQX, OTCQB and OTC Pink ADRs.

OTC Markets Group will decommission the ASCII Reference Data and Trade channels on the evening of May 2, 2014. The ASCII channels have been replaced by binary versions which offer more data points and require less bandwidth.

REDI Global Technologies LLC offers its users access to OTC Markets Level 1+ and Level 2+ (OTCQX, OTCQB, OTC Pink, OTC Bonds) Quotes.

For more information, contact our Market Data Services at 212.220.2166 or marketdata@otcmarkets.com.

Regulation & Compliance

Comment on a Proposed Rule Set for Limited Corporate Financing Brokers Requested


FINRA is soliciting public comment on a proposed rule set for firms that meet the definition of “limited corporate financing broker” (LCFB). An LCFB engages in a limited range of activities with a focus on advising companies and private equity funds on capital raising and corporate restructuring. The proposed rules and the full notice can be found here.

New Requirements Require Alternative Trading Systems to Report Weekly Volume Information


The SEC approved a rule change to require alternative trading systems (ATS) to (i) report to FINRA weekly volume information and number of securities transactions within the ATS by security and (ii) acquire and use a single, unique market participant identifier (MPID) when reporting information to FINRA. OTC Link® ATS will be required to comply with this rule. The full notice can be found here.

Revised Migration Date for New FINRA ORF Platform


FINRA has revised the migration date for firms to begin reporting OTC equity security trades and trades in restricted equity securities effected pursuant to Securities Act Rule 144A to the new OTC Reporting Facility (ORF) technology platform to September 15, 2014. Additional information can be found here.

OTCQX New Additions
Our Marketplaces

9 new companies joined OTCQX in February:

A complete list of OTCQX companies is available on www.otcmarkets.com.

The Best Marketplace

The Venture Stage Marketplace

OTC Pink
The Open Marketplace

Contact Us

To learn more about OTC Market Group visit us at www.otcmarkets.com // 212.896.4420 // issuers@otcmarkets.com

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