Securities Law, NYSE, NASDAQ & OTC Markets Listings & Compliance

OTC Markets Direct – Bypassing the Sponsoring Market Maker Under SEC Rule 15c2-11

In September 2021, the Securities and Exchange Commission (“SEC”) adopted amendments to Exchange Act Rule 15c2-11, reshaping how securities become eligible for public quotation on over-the-counter (“OTC”) markets.

Previously, issuers relied on a sponsoring market maker to file a FINRA Form 211 before quotations could be published. The 2021 amendments authorized qualified inter-dealer quotation systems (“IDQS”)—including OTC Markets Group Inc.—to conduct their own Initial Information Reviews.

This allows issuers to work directly with OTC Markets through its OTCIQ Portal, bypassing the sponsoring market maker while maintaining full compliance under Rule 15c2-11.

Legal Framework: Rule 15c2-11 Amendments

Rule 15c2-11 requires broker-dealers to have access to current, publicly available issuer information before publishing quotations.

The 2021 amendments modernized the process by empowering IDQS platforms like OTC Markets Group to determine whether issuer disclosures meet the rule’s standards. This innovation enhances transparency, standardizes reviews, and reduces dependence on broker-dealer filings.

For the complete text, see SEC Release No. 33-10842 (September 2020).

Step-by-Step Overview of the Direct Review Process

• Apply for Access to the OTCIQ Issuer Portal.
• Complete and Submit the Issuer Verification Form (IVF)
• Submit an Initial Information Review Request, including required financial and corporate disclosures.
• Undergo OTC Markets Staff Review for completeness and accuracy.
• Once accepted, OTC Markets coordinates with FINRA, and quotations may be published without a sponsoring market maker.

Required Disclosures and Supporting Information

Issuers must submit comprehensive documentation addressing corporate identity, operations, and financial transparency. Key disclosure categories include:

• Articles of incorporation, bylaws, and amendments
• Share ledger verifying issued and outstanding shares
• Officer and director biographies with control-person tables
• Two years of financial statements and the most recent interim period
• MD&A analysis covering liquidity, trends, and results of operations
• Material contracts, financing arrangements, and related-party transactions
• Pending litigation and regulatory matters
• Officer certification confirming information accuracy

FINRA Corporate Action Procedures

Issuers completing corporate actions—such as name changes, reverse splits, mergers, or symbol changes—must submit a Corporate Action Notification through FINRA’s portal at least 10 business days before the effective date.

Submissions must include the action type, record date, board resolution, and supporting legal opinions where required.

Ongoing Disclosure Requirements

Once quotations are approved, issuers must maintain current disclosure status under the OTCID Tier.

To remain active, issuers must file quarterly and annual reports through OTCIQ or the SEC EDGAR system. Failure to maintain timely and accurate information may result in status downgrades to Limited or No Information tiers and eventual Expert Market placement, restricted to institutional buyers.

See: FINRA Corporate Actions Portal

Required Forms and Applications

1. OTCIQ Access Application Form
   • Establishes an issuer’s OTCIQ portal account for secure disclosure uploads and communication with OTC Markets staff.
   • Requires company name, incorporation details, executive contacts, transfer agent information, and officer identification. 
   • Attachments include articles of incorporation, bylaws, and ID copies. Fee range $2,000–$5,000.
2. Issuer Verification Form (IVF)
   • Verifies company identity and authorized signatories.
   • Requests details on control persons (> 5 % ownership), directors, officers, and contact information.
   • Must be signed by an authorized officer.
   • Attachments include ID verification and proof of address.
3. Initial Information Review Request Form
   • Begins the formal Rule 15c2‑11 review.
   • Issuer provides detailed business description, two years of financial statements, share structure, MD&A, and material contracts.
   • CEO or CFO certification is required. 
   • Attachments include share ledger and transfer agent confirmation.
4. Officer Certification of Disclosure Accuracy
   • Certifies that all disclosures are accurate and not misleading.
   • Must be executed by both the CEO and CFO, dated, and kept on file.
5. Manager’s Certification
   • Confirms what reporting requirements the company is subject to.
   • Certifies that the company understands its reporting obligations.
   • Confirms information regarding the company’s counsel, officers, directors, large shareholders, and convertible debt holders.
   • The Management Certificate is due 45 days after the due date for the company’s annual report.

Methodology for Identifying Issuers Using Direct Review

OTC Markets has not published a definitive list of issuers that completed quotation solely through its Initial Information Review process. However, the following steps can help identify potential candidates that may have bypassed a sponsoring market maker:

1. Monitor OTC Markets data feeds for reason codes such as ‘Initial Information Review’ or ‘IIR.’
2. Track first‑quote dates and cross‑reference for absence of a FINRA Form 211 filing.
3. Review issuer disclosures for  references to ‘OTCIQ submission’ or ‘initial information review.’
4. Confirm through FINRA records or issuer communications that no sponsoring market maker was involved.
5. Maintain internal tracking record  for verified cases and document supporting evidence.

If you are seeking to quote securities on the OTC Markets or would like to speak with a Securities Attorney, Hamilton & Associates Law Group, P.A. is ready to help. Our Founder, Brenda Hamilton, is a nationally known and recognized securities attorney with over two decades of experience assisting issuers worldwide with going public on the Nasdaq, NYSE, and OTC Markets. Since 1998, Ms. Hamilton has been a leading voice in corporate and securities law, representing both domestic and international clients across diverse industries and jurisdictions. Whether you are taking your company public, raising capital, navigating regulatory challenges, or entering new markets, Brenda Hamilton and her team deliver the experience, strategic insight, and results-driven representation you need to succeed.

To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected].

Hamilton & Associates | Securities Attorneys
Brenda Hamilton, Securities Attorney
200 E Palmetto Rd, Suite 103
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com