OTC Markets Newsletter
OTC Markets Group News           OCTOBER 2015
Why More Foreign Companies are Cross-Trading on OTCQX and OTCQB

This month, we held our first joint event with the Canadian Securities Exchange (CSE) at our OTCQX Market Center in New York City. Eighteen U.S. and Canadian companies participated in CSE Day - New York to learn about the benefits and steps to being cross-traded on the CSE in Canada and the OTCQX® Best and OTCQB® Venture Markets in the U.S.

There are more than 470 foreign companies cross-traded on OTCQX and OTCQB today, most in the form of American Depositary Receipts (ADRs) and foreign ordinary shares (“F shares”). In fact, ADRs and F shares are our largest asset class by dollar volume, making up over 2/3 of trading last year. These companies come from a variety of industries and 87 countries worldwide.

Why are more global companies choosing to cross-trade on the OTCQX and OTCQB markets in the U.S.? There are several reasons:

1. Exposure to U.S. investors and the ability to expand their shareholder base in the U.S. — without the high cost and complexity of a U.S. stock exchange listing

U.S. fund managers own 55% of the world’s assets under management, offering a tremendous opportunity for foreign companies that are looking to raise capital and broaden their shareholder base internationally. Unfortunately, the high cost and duplicative reporting requirements of a U.S. exchange listing make it an unattractive option for many non-U.S. companies.

Fortunately, the OTCQX and OTCQB markets enable foreign companies to realize most of the benefits of being listed on the New York Stock Exchange or NASDAQ with significantly less cost and complexity. Instead of registering with the U.S. Securities and Exchange Commission — a pre-requisite for an exchange listing — companies that are listed in good standing on a qualified foreign stock exchange can use their existing home country disclosure in English to U.S. investors, realizing a significant cost savings.

In addition, OTCQX companies receive the benefit of counsel from a professional third-party advisor — an investment bank, securities law firm or depositary bank — to advise them on engaging U.S. investors and navigating the U.S. investment market.

Some international companies estimate saving tens of millions of dollars a year in legal, accounting and regulatory costs by trading on the OTCQX and OTCQB markets instead of on an exchange.

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2. Convenient and transparent trading, enabling greater liquidity in your stock

Having a U.S. security traded on an “established public market” like OTCQX and OTCQB makes it easier and less expensive for U.S. investors to own your stock. Not only is it now free to quote OTCQX and OTCQB securities on our OTC Link® ATS trading platform, but the higher standards and transparency of the OTCQX and OTCQB markets facilitate broker-dealer trading in a company’s securities.

For example, all OTCQX and OTCQB companies provide investors access to free real-time Level 2 quotes in their securities on the www.otcmarkets.com website so they can see the available liquidity in their stock.

In addition, the OTCQX market has built-in compliance solutions that help streamline and lift some of the restrictions on trading off-exchange-traded securities, such as SEC “penny stock” rule requirements and state Blue Sky Laws.

It should be no surprise that the securities of non-Canadian foreign companies on OTCQX have four times the average daily dollar volume of similar securities on the bottom Pink market. They also average more than 13 broker-dealers per security on OTCQX compared to fewer than 11 broker-dealers per security on OTC Pink, resulting in tighter bid/ask spreads for global OTCQX securities.

Canadian OTCQX companies also fare well with 72% reporting more than 5% U.S. turnover in their stock compared to only 41% of Canadian companies on OTC Pink.

3. Greater visibility with investors through broad distribution of company news and disclosure

As a benefit of qualifying to trade on OTCQX or OTCQB, companies receive access to OTC Markets Group’s OTC Disclosure & News Service® which distributes their news and financial disclosure widely to U.S. broker-dealers and investors.

Our OTC Disclosure & News Service also converts and distributes companies’ financial filings into XBRL format to all the major financial portals and websites like Yahoo! Finance, Google Finance and Bloomberg. This is especially important for non-SEC reporting foreign companies to ensure investors have access to the data they need to automatically analyze and compare companies in similar markets.

The OTC Disclosure & News Service is integrated with most of the major press release distribution services, including PR Newswire, Business Wire and Marketwired, enabling companies to seamlessly meet regulator and market disclosure requirements and amplify their news with a global audience.

4. Distinction from the many companies on the Pink market

Finally, having a U.S. security traded on the OTCQX or OTCQB markets distinguishes you among the most reputable and investor-focused companies trading off-exchange. OTCQX companies count among the world’s largest, most established global companies such as Adidas AG (OTCQX: ADDYY), Canadian Oil Sands Ltd. (OTCQX: COSWF), Heineken N.V. (OTCQX: HEINY) and Shiseido Company Ltd. (OTCQX: SSDOY), while OTCQB companies have met certain disclosure and transparency standards.

OTCQX and OTCQB companies are also eligible for inclusion in our OTCQX and OTCQB indexes which can further increase their visibility with investors.

Global companies have several options when it comes to increasing their exposure to U.S. investors. For many, OTCQX and OTCQB offer the best, most attractive solution – one that enables them to leverage their existing home country listing and disclosure obligations while allowing them to provide an efficient and transparent trading market for their U.S. investors.

Non-U.S. companies that are entering the U.S. market for the first time and those that are already traded by brokers on the Pink or Grey markets can contact OTC Markets Group’s Corporate Services team at +1 (212) 896-4420 or issuers@otcmarkets.com to learn more about OTCQX and OTCQB. For more information, also visit the OTCQX International section on our website at http://www.otcmarkets.com/services/companies/otcqx-international/overview.

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[photo]Get to Know Your Community: Duncan Cooper,
Head of Investor Relations at J Sainsbury plc

This month, we speak with Duncan Cooper, Head of Investor Relations at J Sainsbury plc (LSE: SBRY; OTCQX: JSAIY). One of the UK’s oldest and largest independent grocers, J Sainsbury began trading on the OTCQX Best Market in September as part of a strategy to expand its U.S. investor engagement program. Mr. Cooper talks to us about the state of the UK grocery business, what differentiates Sainsbury’s from its competitors and how the grocer is adapting and growing its business.

OTC Markets Group (OTCM): Founded in 1869, Sainsbury’s is one of the UK’s oldest and largest independent grocers. But you aren’t only a grocer. Tell us how your business has grown over the years and how the company continues to maintain its leading position in the industry.

Duncan Cooper: Sainsbury’s has nearly 150 years of history. Our first store was opened at 173 Drury Lane in London by John Sainsbury and his wife Mary Ann Sainsbury in 1869. The early trading philosophy of the Sainsbury’s store was “Quality perfect, Prices lower.”

In 1882, we started selling our first own brand products, and in 1898, Lloyd Maunder (our longest established supplier) started supplying us with meat and poultry. Today, our stores sell over 15,000 different own-brand products, and we have around 2,000 food suppliers, 1,000 non-food suppliers and five international sourcing offices.

We put our customers at the heart of everything we do and over the years have invested in our stores, our colleagues and our channels to deliver the best possible shopping experience. Our strong culture and values are part of our identity and integral to our success.

Today, Sainsbury’s operates over 1,300 supermarkets and convenience stores and employs around 161,000 colleagues. There are 24.5 million total transactions per week and nearly 15.5 million people use our Nectar card loyalty programme.

We are focused on maximizing the strength of our food and non-food businesses. As well as being the grocer of choice, we also aim to be the clothing, general merchandise and financial services brand of choice and to expand our existing offer in these areas.

Click to read more.

OTCM: What is the state of the UK grocery business today and how is Sainsbury’s meeting changing trends?

Mr. Cooper: Over the past year, UK consumer confidence has recovered as household income has improved. Reduced unemployment rates and real wage growth have led to an increase in the amount of money consumers have to spend. In addition, there has been a slowing of inflation on many household essentials, with deflation in various commodities including fuel, fresh produce and meat. This, coupled with the competitive pricing environment which has seen significant price investment across the market, has allowed customers to benefit from reduced prices in their grocery shop.

Even in this environment, volume growth has remained relatively low. Instead, increasingly confident consumers are choosing to treat themselves to things which they missed out on during recessionary years like eating out more frequently and purchasing big ticket items.

The savvy shopping behaviour learned during the recession has driven a structural shift in the market. Customers have been managing their budgets by shopping more frequently and wasting less. The move away from one weekly shop has been supported by the growth of convenience stores, improvements and confidence in the ease and security of shopping online and the rise of discounters.

As customers use these channels more frequently, volumes in supermarkets are continuing to decline. However, supermarkets will remain the dominant channel, with forecasts indicating that approximately 60 per cent of grocery spend will still be made in supermarkets by 2022.

Sainsbury’s is well positioned to respond to these changing trends. Our supermarket portfolio is structurally advantaged, with stores of a more appropriate size than our major competitors, and a greater location bias to the South East. At Q2 this year, we had 741 convenience stores with a plan to add 1-2 per week this year. We also have a growing online groceries business, with annual sales in excess of £1bn. Finally, last year we launched our own discounter fascia with the re-launch of Netto in a 15-store trial with Dansk Supermarked in the U.K.

OTCM: How does Sainsbury’s differentiate itself from the competition?

Mr. Cooper: Our differentiation is founded on our strong values: best for food and health, sourcing with integrity, respect for our environment, making a positive difference to our community and a great place to work.

Providing great food is Sainsbury’s core purpose. Customers continue to rate us above our main supermarket peers on product quality and this is key to winning customer loyalty. We are making good progress in our programme to improve the quality of 3,000 own-brand products, investing in the products that matter most to our customers.

For example last year, we improved the quality of our Taste the Difference burgers, our by Sainsbury’s cheesecake, and our by Sainsbury’s all-in-one dishwasher tablets, which recently won “Which? Best Buy 2015”. The rate at which we launch these new products will increase over the next 12 months.

Our focus on quality, provenance and sustainability differentiates us from our competitors. Our British sourcing credentials are an important part of our customer proposition. We sell over 1,900 own-brand products sourced from the UK and we are always looking to increase the number of British lines we sell.

This year, we developed our game range, including new venison lines, and we promoted lesser-known species of fish such as sustainably-caught coley and responsibly-sourced river cobbler, giving our customers greater variety and choice. For a number of years, all our fresh, breaded and cooked chicken has come from the UK, as does fresh pork and fresh lamb in the main season.

Our fresh and frozen beef is British or Irish. We continue to work with our long-standing Development Groups of farmers and growers to share best practice and develop more efficient and sustainable ways of working.

Last year, we were named Drinks and Seafood Retailer of the Year at the Retail Industry Awards and Fish Retailer of the Year by the Marine Stewardship Council.

OTCM: Congratulations to J Sainsbury on upgrading its ADR to OTCQX from the Pink market on September. What caused you to make that move and what are your goals in the U.S. investment market?

Mr. Cooper: A year ago, we decided to step-up our U.S. investor engagement programme. We have increased the number of roadshows, conferences and communications with U.S.-based investors and have seen the percentage of U.S. share ownership steadily increase. Moving onto OTCQX was the logical next step as we seek to raise the company’s profile even further with American and Canadian investors. We know investors value the flexibility and credibility of the OTCQX platform, and as such we hope this move will be complementary to our own efforts, opening up new lines of conversation with the U.S. investment market.

OTCM:What else do you want U.S. investors to know about J Sainsbury?

Mr. Cooper: That we are a very open organisation that is keen to engage with both new and established investors. If you would like to find out more about our business, our story and our plans for the future then please don’t hesitate to contact the Investor Relations Team.

Duncan Cooper – Head of Investor Relations +44(0) 207 695 4740

Jo Le Neve Foster – Investor Relations Manager +44 (0) 207 695 7856

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Light Up The Market

Canadian Securities Exchange CEO Richard Carleton (right) during CSE Day at the Market Center

Chris Munday (left), CFO of Linc Energy Ltd (Singapore Exchange: TI6; OTCQX: LNCGY) joins OTC Markets Group EVP Jason Paltrowitz at the Market Center

Senior executives from Thin Film Electronics ASA (Oslo Bors: THIN; OTCQX: TFECY) with OTC Markets Group VP Bob Power Light up the Market

OTCQX companies Light up the Market to celebrate joining our Best Market!


South Atlantic Bancshares, Inc. (OTCQX: SABK)
Targeted Microwave Solutions Inc. (CSE: TMS; OTCQX: TGTMF)
Monthly Trade Summary

September 2015

Market Designations # of Securities* Monthly Dollar Volume Monthly Dollar Volume
per Security
YTD Dollar Volume
OTCQX® 409 $4,338,706,209 $10,608,084 $31,693,014,234
OTCQB® 1,032 $685,087,048 $663,844 $17,027,614,299
OTC Pink® 8,437 $10,199,504,836 $1,208,902 $105,046,401,372
Totals 9,878 $15,223,298,093 $1,541,132 $153,767,029,905
*Data as of September 30, 2015
Events, Webinars & Sponsorships
MBA Bank Management and 2015 Directors Conference (December 2-4, 2015)

LD Micro Conference (December 2-3, 2015)

PR Newswire and OTC Markets No Blank Screens Event - Tel Aviv, Israel (November 29, 2015)

IR Society’s Best Practice Awards Dinner - London (November 24, 2015)

9th Annual DRIC Indian Sub-Continent Conference - Kochi, India (November 19, 2015)

The Growth Capitalist Summit 2015 - Washington DC (November 18, 2015)

25th Annual STANY International Reception and Holiday Party (November 12, 2015)

Hot Topics Roundtable Regulation A+: Issuers & Applications (November 12, 2015)

Take Stock! Conference - Calgary, Canada (November 6, 2015)

Global Alternative Funding Forum - Los Angeles, CA (November 6, 2105)

Regulation A+ Roundtable with McCarter & English, CohnReznick and OTC Markets Group - New York, NY (October 20, 2015)

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

View recordings from our recent webinars

Regulation A+ Practical Tips and Guidance for Launching a Mini-IPO

Virtual Investor Conference for OTCQX Life Science Companies
OTC Markets Group Announces Quarterly Index Performance and Rebalancing - press release (October 20, 2015)

As Demand for OTC Markets Data Rises, Xignite Integrates Real-Time Feed - Finance Magnates (October 7, 2015)

Xignite Expands OTC Markets Data to Real-Time Level 1 Over Web Services - Inside Market Data/WatersTechnology.com (October 6, 2015)

Small companies rev up Reg A+ offerings - The PIPES Report (October 6, 2015) (subscription required)

History of OTC Markets and Relationship to MicroCap Stocks with Jason Paltrowitz, OTC Markets Group - Planet MicroCap Podcast (September 29, 2015)

OTC Markets Group to Host Virtual Investor Conference for OTCQX Life Science Companies - October 1 - press release (September 28, 2015)

Market Data Feed Redundancy Initiative

OTC Markets Group is amending the timeline for the Market Data Feed Redundancy Initiative. The legacy multi-cast IPs/groups will continue to run in parallel with the new IPs/groups until December 4, 2015. After December 4th, the legacy IPs/groups will be decommissioned. The new IPs, Groups and Ports may be found here.

Contact Market Data Services at marketdata@otcmarkets.com for more information.
Foreign Ordinary Shares of OTCQX Companies Now Designated as OTCQX

On October 1, 2015, the foreign ordinary shares (F shares) of global companies with a security already traded on our OTCQX Best Market were designated as OTCQX. These F shares were previously traded on the Pink Market.

Combining these securities on OTCQX provides an informed and efficient trading experience for U.S. investors and broker-dealers in all of a company’s securities. OTCQX indicates to U.S. investors that a company has met high financial standards and consistently provides high-quality information to the U.S. market.

For a full list of OTCQX companies click here.

Contact Corporate Services at issuers@otcmarkets.com for more information.
White Paper
J.P. Morgan White Paper Highlights Level 1 ADRs for ETFs

J.P. Morgan has published a White Paper asking whether rules limiting the inclusion of Level 1 ADRs in Exchange Traded Funds (ETFs) should be reevaluated given the evolution of OTC Markets Group’s markets in the past several years. The report highlights the improved price transparency and trading volumes for Level 1 ADRs on our markets, as well as the growth in the number of global blue-chip companies that have joined our markets, such as Adidas, Danone, Heineken, Roche and Volkswagen. According to the report, the average daily trading volume for the top 100 most liquid Level 1 ADRs has increased by 65% over the past 15 years and approximately 50% of the top 100 European ADRs are now traded on our markets. Read the White Paper here.
Congratulations to the latest companies to graduate from our markets to a U.S. exchange listing.

The OTCQX Best Market

Klondex Mines Ltd. (NYSE MKT: KLDX)

The OTCQB Venture Market

Staffing 360 Solutions, Inc. (NASDAQ: STAF)
Titan Pharmaceuticals, Inc. (NASDAQ: TTNP)
6 companies qualified for the OTCQX Best Market in September

J Sainsbury plc (OTCQX: JSAIY)
Levon Resources Ltd. (OTCQX: LVVNF)
Nano Dimension Ltd. (OTCQX: NNDMY)

Newmarket Gold Inc. (OTCQX: NMKTF)
Repro Med Systems, Inc. (OTCQX: REPR)
Terra Tech Corp. (OTCQX: TRTC)

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

34 companies were verified for the OTCQB Venture Market in September.

Aladdin Intl Inc. (OTCQB: ALAD)
Albero Corp. (OTCQB: ALLR)
Amarc Resources Ltd. (OTCQB: AXREF)
Aspen Group Inc. (OTCQB: ASPU)
Avant Diagnostics, Inc. (OTCQB: AVDX)
Axios Mobile Assets Corp. (OTCQB: AXBSF)
BG Medicine, Inc. (OTCQB: BGMD)
biOasis Technologies Inc. (OTCQB: BIOAF)
Cabinet Grow Inc. (OTCQB: CBNT)
Cambridge Projects, Inc. (OTCQB: CPJT)
EF Hutton America, Inc. (OTCQB: HUTN)
Electronic Cigarettes International Group, Ltd. (OTCQB: ECIG)
Energizer Resources Inc. (OTCQB: ENZR)
Energizer Tennis, Inc. (OTCQB: EZRT)
First Asia Holdings Limited (OTCQB: FAHLF)
ForeverGreen Worldwide Corp. (OTCQB: FVRG)
Fundamental Applications Corp (OTCQB: FUAPF)
Global Equity International Inc (OTCQB: GEQU)
Immuron, Ltd. (OTCQB: IMROY)
Kashin, Inc. (OTCQB: KUSA)
Kura Oncology, Inc. (OTCQB: KURO)
LiveReel Media Corp. (OTCQB: LVRLF)
Major League Football, Inc. (OTCQB: MLFB)
Mazzal Holding Corp (OTCQB: MZZL)
New Media Insight Group, Inc. (OTCQB: NMED)
Pulse Evolution Corp (OTCQB: PLFX)
PyroGenesis Canada Inc. (OTCQB: PYRNF)
Sernova Corp. (OTCQB: SEOVF)
Seychelle Environmental Technologies, Inc. (OTCQB: SYEV)
Soupman Inc. (OTCQB: SOUP)
Stans Energy Corp. (OTCQB: HREEF)
StationDigital Corporation (OTCQB: SDIG)
Trxade Group, Inc. (OTCQB: TRXD)
Verso Corporation (OTCQB: VRSZ)
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To learn more about OTC Market Group visit us at www.otcmarkets.com // +1.212.896.4420 // issuers@otcmarkets.com
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