New OTCQB Requirements, Listing & Quotation

EB-5 Offering

Hamilton & Associates Law Group – Client Update

The OTC Markets Group recently established new eligibility standards for the securities companies to quoted on the OTCQB® Venture Stage Marketplace.  OTCQB companies must comply with the new OTCQB eligibility requirements within 120 days after its fiscal year end. This new requirements include an annual certification and annual fees. Issuers with a March 31st fiscal year end must comply with the new OTCQB eligibility requirements by July 31, 2014. Companies that do not comply with the new procedures within the time allowed will be demoted to the OTC Pink tier.

OTCQB Annual Certification

Under the new eligibility requirements, each OTCQB company will be required to post an annual certification through the OTC Markets website stating: (i) the company’s reporting standard and describing the registration status of the company; (ii) that the company is current in its SEC reporting requirements and such information has been posted either on the SEC’s EDGAR database or the OTC Markets website; (iii) the identity of the law firm and/or securities attorneys involved in the preparation of the issuer’s Annual Report or Form 10-K; (iv) the company’s public profile posted on the OTC Markets website is current and complete; (v) the total number of shares outstanding and in the company’s public float as of the most recent fiscal year end; and (vi) the names and securities ownership of all officers, directors, and shareholders holding more than five percent of the company’s shares outstanding.


New companies listing on OTCQB must pay a one-time application fee of $2,500, which is waived for current OTCQB companies. Existing OTCQB companies must pay an annual fee of $10,000. For existing OTCQB companies that apply in 2014, the annual fee will be reduced to $7,500 for each of the first two years of listing.

Minimum Bid Price Test

As of May 1, 2014, all current and prospective OTCQB-quoted companies must meet a minimum bid price as follows: (i) the company must have a minimum bid price of $0.01 per share as of the close business for each of the previous thirty consecutive calendar days and (ii) once quoted on the OTCQB, the company must maintain a minimum bid price of $0.01 per share as of the close of the business for at least one of every thirty calendar days. OTCQB listed companies which do not meet this minimum bid test will be demoted from OTCQB and downgraded to OTC Pink.

International Reporting Companies

International reporting companies quoted on the OTCQB that are in compliance with SEC Rule 12g3-2(b) and listed on a qualified foreign stock exchange can apply to trade on OTCQB. In addition to meeting the initial bid price test and submitting an initial application and applicable fees, international reporting companies also need to submit a “Letter of Introduction” from a qualified Principal American Liaison (PAL) which states that the PAL has a reasonable belief that the company is in compliance with Rule 12g3-2(b), is listed on a qualified foreign exchange and has posted the required disclosure on the OTC Markets website, including the previous two years’ disclosure required under Rule 12g3-2(b) in English (except press releases) and submit an initial OTCQB certification. Once a company becomes listed on OTCQB, if an international reporting company, it must meet the ongoing minimum bid price test, post required disclosures on the OTC Markets website under Rule 12g3-2(b) in English, including Quarterly Reports and audited Annual Reports, and submit annual OTCQB certifications to the OTC Markets.