Introduced last May, more than 1,000 securities have been approved to trade on it under new requirements designed to improve overall investment quality while also creating a transparent U.S. public venture market.
OTC Markets Group originally introduced the standards and eligibility requirements for companies wishing to trade on OTCQB. These included a minimum one penny bid price test and an annual verification and management certification process.
Companies already trading on the OTCQB on May 1, 2014 could choose to comply with the new standards within 120 days after their fiscal year-end, opt for the OTCQX Best Market, which features third-party sponsorship and high financial and disclosure standards, or be downgraded to the OTC Pink Open Market.
“The introduction of our OTCQB standards and eligibility requirements has truly transformed OTCQB into a better regulated, more transparent, world-leading public venture market for developing companies,” said R. Cromwell Coulson, President and CEO of OTC Markets Group. “As of July 1, there are 960 companies traded on OTCQB with a median market capitalization of approximately $12.8 million. This compares favorably to the median market cap of $2.1 million for companies on Canada’s TSX Venture Exchange.”
Mr. Coulson said their diligence is shown by the number of companies they removed from the exchange and transferred to OTC Pink.
“At the same time, we have removed more than 2,000 companies from OTCQB for failing to meet our OTCQB standards either because they did not pass our minimum bid price test, were delinquent in their financial filings, bankrupt, unwilling to provide background information about company officers, directors and shares outstanding or for another compliance reason. These companies have been downgraded to our OTC Pink market, where broker-dealers can place the appropriate risk controls and compliance restrictions around less transparent companies.”
On July 1 the OTCQB featured 1,033 securities from 48 U.S. states and territories and 25 countries. The combined market capitalization is $74.2 billion.