How does a company get quoted?(interesting read from a transfer agent's website)
To get quoted, you need to find one market maker willing to quote your company's stock. Only SEC-registered broker-dealers (market makers) that are members of the Financial Industry Regulatory Authority (FINRA) can quote securities. The market maker must file a Form 211 with FINRA in order to start quoting.
How can I find a market maker to file a Form 211?
We cannot recommend specific market makers. However, a list of market makers is available upon request. We welcome potential issuers to contact them to discuss making a market in their company's stock.
Is there a way to get quoted without a Form 211?
Yes, if a market maker determines the security is eligible for one of the following exceptions under SEC Rule 15c2-11:
The security is currently listed on a U.S. exchange.
The market maker wishes to submit an unsolicited quote. An unsolicited quote represents a customer order and not a market maker's own position and must be removed from the system once the customer order is executed
The security is piggyback eligible. A security becomes piggyback eligible when it has been quoted by at least one market maker for a minimum of 30 days.
The "Globenet Exemption." Under this exemption, a market maker can initiate a quotation for an OTCBB-only quoted security without submitting a Form 211 to FINRA, subject to the following conditions:
Each broker or dealer relying upon this exemption must have in its records information specified in paragraphs (a)(5)(i), (a)(5)(viii), (a)(5)(xiv), (a)(5)(xv), and (a)(5)(xvi) of Rule 15c2-11;
Two-way bid and ask priced quotations that do not reflect customer indications of interest must have been published during the previous 30 calendar days, with no more than four business days in succession without such quotations, in an interdealer quotation system that displays unsolicited customer indications of interest;
The issuer of the security has not been delinquent in any of its reporting obligations under the Exchange Act or rules thereunder for more than 30 days, if subject to Section 10(a) or 15(d) of the Exchange Act;
Since the issuer of the security filed its most recent annual report, the issuer has not filed a report with respect to any event included in Item 1.03 (Bankruptcy or Receivership), Item 2.01 (Acquisition or Disposition of Assets), Item 4.01 (Changes in Registrant's Certifying Accountant), Item 5.01 (Changes in Control of Registrant), and Item 5.02 (Departure of Directors or Certain Officers) of Form 8-K under the Exchange Act
The issuer of the security is not exempt from the registration requirements under Section 12(g) of the Exchange Act pursuant to Rule 12g3-2(b); and
The issuer of the security is not the subject of bankruptcy proceedings.
Are there any filing requirements in the OTC market?
Issuers are not required to register securities with the Securities and Exchange Commission (SEC), or be current in their reporting requirements to be quoted on the OTC system. Nor are issuers required to file financial or other company information with OTC Markets. However, issuers are classified for investors based on the level of information they do provide about their company.
SEC Rule 10b-17 requires all issuers of publicly traded securities, including all OTCQX, OTCQB and OTC Pink securities, to notify FINRA at least 10 calendar days prior to the record date of any dividend or other distribution, stock split, reverse split, or rights or subscription offering.
Do financial statements have to be audited?
Current FINRA rules do not require the financial statements of non-SEC reporting issuers to be audited in order for them to clear a Form 211, but they should be prepared in accordance with GAAP or, for foreign issuers, in accordance with their home country's accounting standards.
What are the fees?
There is no fee for issuers to have their stock quoted on the OTC inter-dealer quotation system. Market makers are charged for each security in which they make a market in the OTC system and are prohibited by FINRA Rule 2460 from accepting payment by an issuer or their affiliate for publishing quotes.
Bullish
