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OTC Markets Newsletter - September 2012
September 2012

The JOBS Act is Ending the Dark Ages for Capital Formation
A Note from the CEO, R. Cromwell Coulson

The Jumpstart Our Business Startups (JOBS) Act recently enacted by Congress will fundamentally change U.S. securities law. Previously, federal law mandated that all private capital raising activity be hidden from the public. The theory was that investor protection required prohibiting access to information or publicity about private capital raises. Among capital raises, only SEC registered offerings were deemed safe enough to allow widespread distribution of information to the public, and even then the distribution of information was limited to a registration statement with the SEC.

The JOBS Act rejects the prior theory that prohibited information distribution and adapts U.S. securities law to our interconnected world in which information can easily travel across the Internet and market data networks. Investors should be protected based on their level of sophistication, but all investors benefit from public availability of information about companies and the trading of their securities.

The SEC staff has begun the hard work of crafting the Congressional intent behind the JOBS Act into effective and well-written securities laws. As part of this effort, the SEC has published for comment proposed rule changes that would remove restrictions on general solicitation and advertising for transactions under SEC Rule 144A and Regulation D, specifically Rule 506. These important changes are going to bring sunlight into the previously dark worlds of Reg. D and Rule 144A, while creating new opportunities for transparent capital raising by U.S. and global companies. Lifting restrictions on the distribution of information regarding 144A securities also means these securities may be transparently traded on our marketplaces by broker-dealers, for their own accounts and on behalf of other Qualified Institutional Buyers (QIBs), leading to improved price formation and greater secondary liquidity.

As an operator of Open, Transparent and Connected financial marketplaces, we support this modernization of our securities laws. Transparency of information makes markets better informed and more efficient. We hope you take the opportunity to understand these changes and participate in the SEC comment period, by reviewing the proposed rule changes here: https://www.federalregister.gov/articles/2012/09/05/2012-21681/eliminating-the-prohibition-against-general-solicitation-and-general-advertising-in-rule-506-and. Please note that comments are due by October 5th.

This month's community member - Carl Goltermann, C.K. Cooper & CompanyGet to Know Your Community:

Carl Goltermann, C. K. Cooper & Company

This month, we sat down with Carl Goltermann from C. K. Cooper & Company, a DAD/PAL Investment Bank advisor for a number of OTCQX companies.

Q: Tell us a little bit about C. K. Cooper and the markets you serve.
A: C. K. Cooper is a 16 year-old full service investment bank based in Irvine, California that is focused on micro and small-capitalization companies in the Energy, Healthcare, and Aerospace, Defense & Government sectors. We have been under current management since 1996 and have focused on this niche because it has traditionally been underfollowed and underappreciated by our larger peers. C. K. Cooper is a relationship-focused bank that strives to grow with our clients through multiple transactions, as shown by more than half of our transactions being done with previous clients.

Q: How does C.K. Cooper use OTC Markets for its customers and how is it similar to or different from how you use NYSE and NASDAQ?
A: We generally advise our clients that they want to be quoted on the highest marketplace they qualify for. Companies are competing for investor attention and every tool can help them get noticed. Being on OTCQX provides investors with the comfort that the issuer has differentiated itself from others by partnering with a reputable investment bank. OTCQX also provides valuable services to issuers that are not currently offered elsewhere, such as the OTC Disclosure and News Service, which makes it easier for the issuer to communicate with shareholders. We find the trading system to be an invaluable tool as we provide our full range of services to our clients.

Click here to read the entire interview.

OTC Market Regulation & Compliance

FINRA Rule 6433

On August 5, 2012 FINRA announced that the SEC-approved amendments to FINRA Rule 6433 (Minimum Quotation Size Requirements for OTC Equity Securities) will become effective on November 5, 2012. The Rule has been approved for a 1 year pilot period. The new quotation size tiers are as follows:


Price (Bid or Offer) Minimum Quote Size (# of Shares)
$0.0001 to $0.0999 10,000
$0.10 to $0.1999 5,000
$0.20 to $0.5099 2,500
$0.51 to $0.9999 1,000
$1.00 to $174.99 100
$175.00+ 1


For full details of this announcement, please see: FINRA Regulatory Notice 12-37.

Market Data Updates

• FactSet, a leading provider of financial information and analytics, is now making OTC Markets’ level 2 data available to its subscribers. Read More >

• OTC Markets data is available through a large number of major online brokerages, financial portals and financial distribution networks. Find out where you can obtain real-time data on OTC securities - OTC Market Data Distributors & Websites

Over 99% of all priced OTC quotes are now found on the OTC Link® ATS, with less than 1% of priced quotes on the FINRA OTCBB.


OTC Events

OTC Markets Group has attended or will be participating in the following events to educate investors, broker-dealers, and OTC companies about our marketplaces.

ClearTrust LLC Dodd-Frank Breakfast (Nov. 9, 2012)

The DealFlow Conference 2012 (Nov. 1, 2012)

AGC Partners’ Annual East Coast Conference (Oct. 16-17, 2012)

4th Annual Depositary Receipt Issuers' Conference (Oct. 12-14, 2012)

IR Magazine Think Tank – Canada 2012 (Oct. 10, 2012)

2012 Angel Capital Association (ACA) Leaders Workshop (Oct. 4-5, 2012)

STA 79th Annual Conference (Sept.19-22, 2012)

NASAA 2012 Annual Conference (Sept. 9-11, 2012)

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

OTC Markets News

OTC Market To Undergo Structural Changes - Traders Magazine (Sept. 19, 2012)

OTC Markets Group to Provide Level 2 Data on Nearly 10,000 OTCQX, OTCQB and OTC Pink Securities Through the FactSet Platform (Sept. 18, 2012)

Ex-Amex Topper Joins Board of OTC Markets Group - Traders Magazine (Sept. 13, 2012)

OTC Markets Group Names Neal Wolkoff and Louisa Serene Schneider to the Board of Directors (Sept. 11, 2012)

OTC Markets Group Announces Second Quarter 2012 Financial Results (Aug. 13, 2012)

OTC Markets Monthly Trade Summary - August 2012

OTC Marketplace # Securities* Monthly Dollar Volume Monthly Dollar Volume
per Security
Aggregate Market Capitalization
(in Millions)*
OTCQX® 387 $1,926,706,414 $4,978,570 $1,138,820
OTCQB® 3,442 $2,267,443,535 $658,758 $173,489
OTC Pink® Current Information 2,342 $6,113,060,167 $2,610,188 $9,126,681
OTC Pink Limited Information 740 $142,345,895 $192,359 $8,081
OTC Pink No Information 3,000 $268,034,852 $89,345 $27,787
Totals 9,911 $10,717,590,863   $10,474,858
* Selected data as of August 31, 2012.

OTCQX Case Study - LiqTech

To help you better understand how companies use the OTCQX marketplace and the tools and services it offers, we will be distributing case studies reviewing current OTCQX companies.

Please read about  LiqTech (OTCQX: LIQT) to learn how they leverage OTCQX to provide the most efficient and transparent market possible for their investors. Learn why they decided to upgrade from OTCQB to OTCQX: LiqTech Case Study.

OTCQX - New this Month - New Additions

Six companies joined OTCQX in the month of August.

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

OTC Marketplaces

The intelligent marketplace for the best OTC companies with the highest financial standards and superior information availability.

The venture marketplace for companies that are current in their reporting with a U.S. regulator.

OTC Pink
The open marketplace for a wide spectrum of equity securities.

For questions, please contact OTC Markets Group.
www.otcmarkets.com • 212-430-3690 • info@otcmarkets.com
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© 2012 OTC Markets Group Inc.