Securities Law, NYSE, NASDAQ & OTC Markets Listings & Compliance
Annual and Quarterly Reporting Under the OTC Markets Alternative Reporting Standard
The OTC Markets Alternative Reporting Standard provides a disclosure framework for companies that are not required to file reports with the SEC. Under this standard, issuers post financial and corporate information to the OTCIQ disclosure portal to satisfy the public information requirements of Rule 15c2-11. To maintain Current Information status, issuers must publish annual and quarterly reports, officer certifications, and a Manager’s Certificate with Respect to Current Information.
Who Must Comply With the Alternative Reporting Standard
The standard applies to non-SEC-reporting issuers quoted on OTCID (Current Information) or OTCQB, certain foreign private issuers not filing Form 20-F or 6-K, and private companies seeking quotation under Rule 15c2-11. Failure to post required disclosures leads to a downgrade or suspension.
Annual Report Requirements
Annual reports must be uploaded to OTCIQ within 90 days of the fiscal year end and include:
- Financial Statements: Balance Sheet, Income Statement, Cash Flows, and Stockholders’ Equity.
- Notes to financials describing accounting policies and significant items.
- If available, the auditor’s report with firm credentials.
- Comparative prior-year financial information.
- Management’s Discussion and Analysis (MD&A) covering operations, liquidity, and future plans.
- Corporate Information: business description, officers, directors, share structure, and transfer agent.
- Officer Certification signed by the CEO and CFO affirming the accuracy of the report.
Quarterly Report Requirements
Quarterly reports must be filed within 45 days of quarter-end and include unaudited financials, Management Discussion and Analysis (MD&A) discussion, and updates to share structure or management. Failure to post three consecutive quarters results in a downgrade to Limited Information.
Manager’s Certificate
The Manager’s Certificate is
The Management Certificate is due 45 days after the due date for the company’s annual report. It is used for the following:
- 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.
Additional Information to Be Disclosed
Issuers must also disclose the following information:
- Material contracts and shareholder agreements.
- Changes in control or major financing transactions.
- Legal proceedings and pending litigation.
- Current website and investor-relations contact details.
OTC Markets Common Reporting Mistakes & Disclosure Failures
- Unsigned or incomplete financial statements.
- Missing MD&A discussion or liquidity analysis.
- Lack of officer certification.
- Failure to respond to OTC Markets inquiries.
Maintaining Current Information Status on the OTC Markets
Issuers must remain current with filings, respond promptly to compliance queries, and ensure Manager’s Certificates and financials are up to date. Financial statements older than 16 months trigger an automatic downgrade to the Expert Market until compliance is restored.
Conclusion
The Alternative Reporting Standard allows non-SEC-reporting issuers to maintain transparency and market access through OTCIQ filings. Accurate, timely reporting and properly executed Manager’s Certificates are critical for maintaining Current Information status and investor confidence.
Hamilton & Associates Law Group assists issuers with Rule 15c2-11 compliance, Alternative Reporting Standard filings, and OTCIQ submissions to prevent downgrades or suspension.
