What is the Role of a Sponsor?
As part of the approval process, OTCQX companies are required to submit a letter of introduction from an OTCQX Sponsor. An OTCQX Sponsor can be either an approved investment bank, attorney or DR Bank. OTCQX Sponsors can also provide professional guidance to generate investor demand, build long term relationships, and assist the company in adhering to disclosure protocols. View a list of OTCQX Sponsors.
Qualify to Become an OTCQX Sponsor
The integrity of the OTCQX market relies on the quality of the companies that are sponsored for membership. OTCQX Sponsor standards are designed to create a more credible and trustworthy market by limiting OTCQX Sponsor status to the most qualified firms.
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|Agreement to Serve as an OTCQX Sponsor||Word|
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|Personal Information Form - Additional Disclosure Reporting (upon request only)||Word|
FINRA Investment Banking Firms:
- Must be actively engaged in the investment banking or securities business, in present form or through predecessor broker-dealer entities, for at least two years;
- Must have net capital computed pursuant to the provisions of Rule 15c3-1 under the Exchange Act of not less than $1 million;
- If a corporation, a majority of the Applicant's board of directors; a partnership, a majority of its general partners; or if a limited liability company, a majority of its managing members, must have been actively engaged in the investment banking or securities business for the past two years;
- Must be actively engaged as an underwriter or selling agent in public or private offerings of equity securities, as a manager or co-manager, and during the last five years, must have raised more than $50 million of aggregate gross proceeds in such offerings for issuers of Equity Securities that were listed on The New York Stock Exchange ("NYSE"), Nasdaq or NYSE AMEX;
- Must be a FINRA registered broker-dealer in good standing; and FINRA approved to participate in firm commitment underwritings under the category: "Underwriter or Selling Group Participant (corporate securities other than mutual funds)";
- Firms that do not meet one of the eligibility requirements may be exempted from such requirement if the firm can explain why its business model makes it difficult to meet the requirements and provide evidence of its ability to adequately act as a professional and sophisticated OTCQX Sponsor.
Each Attorney Providing Services as an OTCQX Sponsor:
- Must be in good standing in each jurisdiction in which he or she is licensed to practice law, and have had no disciplinary actions within the last five years;
- Must not have been suspended or denied the privilege of practicing before the U.S. Securities and Exchange Commission (the "Commission");
- Must demonstrate substantial experience, either alone or through collaboration with another attorney, providing advice regarding disclosure obligations under the federal securities laws to an issuer with a class of securities registered under Section 12(b) of the Securities Exchange Act of 1934 (the "Exchange Act")
FINRA Rule 2460 - Payments for Market Making
Services rendered in acting as an OTCQX Sponsor may fall within the exception of Rule 2460(b), which permits a member to accept payment for bona fide services. For more information, see FINRA Letter dated October 6, 2006, in which FINRA provides interpretive guidance to Rule 2460.
Application Fee: Non-refundable fee of $1,000 (U.S.)
Annual Fee: $1,000 (the first year's annual fee shall be waived)