The OTC equity market operates within a unique, often complex regulatory environment. While much of the securities industry focuses solely on federal laws and regulation, the companies, broker-dealers, investors and others comprising the OTC market must understand the impact of state “Blue Sky” laws as well. Continue reading “Understanding Blue Sky Laws”
We recently announced the 2018 OTCQX® Best 50. Now In its 4th year, our annual ranking highlights the top 50 U.S. and international companies traded on the OTCQX Best Market, based on an equal weighting of one-year total return and average daily dollar volume growth. The companies featured in the Best 50 were ranked based upon their performance during the 2017 calendar year.
In a World Where the “News Cycle,” Both Real and Fake, is 24/7, How Can Companies be Their Own Best Ally and Not Their Own Worst Enemy?
In a recent webinar on Corporate Governance, by Compass Investor Relations, the presenters touched upon the value of best practice corporate disclosure.
Compass Investor Relations partners Mark Collinson and Elaine Ketchmere, shared their thoughts:
There has always been real and fake news. Today, this news can be transmitted, duplicated, discussed, endorsed, refuted and recycled in an instant.
And so how do companies ensure that their securities prices reflect the true nature of the company’s performance and prospects? Continue reading “The True Value of Best Practice Disclosure”
As OTC Markets Group continues to position itself as a respected venture trading platform, it has adopted a new stock promotion policy and best practices guidelines to improve investor transparency and address concerns over fraudulent or improper stock promotion campaigns. The stock promotion policy and best practices guidelines are designed to assist companies with responsible investor relations and to address problematic issues. Recognizing that fraudulent stock promotion is a systemic problem requiring an all-fronts effort by industry participants and regulators, the new policy focuses on transparency and disclosure of current information, and the correction of false statements or materially misleading information issued by third parties.
For small cap companies, the view of communications is most often through the lens of Investor Relations (IR) – the process of interacting with shareholders, the investment community and the financial media.
Since the primary objective of any public company is to enhance shareholder value, attract new investors and meet regulatory obligations, the need for IR is self-evident, whether conducted by senior executives, internal IROs or external IR professionals.
The increased proliferation of digital platforms, social media and online investment newsletters can offer today’s public companies and investor relations professionals more immediate access to engage with a broader universe of potential investors. However, this technology-driven environment can also create additional channels for abuse by anonymous market manipulators.
Fraudulent stock promotion is an industry-wide problem. Such deceitful promotion campaigns mislead investors, harm market dynamics, impede the capital formation process and tarnish the reputation of small companies. It is incumbent upon regulators and those of us who operate financial markets to take a closer look at fraud and manipulation as it relates to stock promotion, trading and investments. Continue reading “Shining a Light on Stock Promotion… New Policy + Best Practices = Enhanced Market Transparency”
Building a Sustainable Public Company with Longer-Term Investors
Much attention has focused on recent Reg A deals (Arcimoto, Shiftpixy, Chicken Soup for the Soul Entertainment, Myomo and Adomani) that have listed on national exchanges (Nasdaq and NYSE). But the question remains, is this the right move for small-caps seeking to become public companies through innovative capital raising frameworks? After the excitement of ringing a bell has worn off, the visibility has dissipated, the bankers have been paid and the festivities come to a close, a bigger challenge begins for management to grow the value of their business while balancing the resource-intensive requirements of maintaining a listing on a national exchange.
Reg A was designed for small companies, start-ups, entrepreneurial innovators and those seeking to alleviate the cost, time and complexity associated with the traditional IPO process. Part of the larger JOBS Act story, this legislation increased opportunities for transparent and online capital raising whereby small cap companies could embrace technology and the internet to improve sourcing of, and access to capital, ultimately allowing more individual investors to participate. Continue reading “Short-Term Gain = Long-Term Pain?”
Earlier this year we shared the results from our inaugural Small-Cap Survey. Our final whitepaper with IR Magazine on small-cap company issues was influenced by the key finding that 70% of CEOs/CFOs at small-caps manage their IR internally, but they spend only 11% of their time on investor outreach. Given today’s competitive financial markets landscape, the ability of small and micro-cap companies to gain exposure and attract a targeted investor base is even more critical. Continue reading “Discover Small-Cap IR Best Practices to Attract Investors”
Earlier in 2017, The World Federation of Exchanges (WFE) released their report highlighting major barriers of entry to equity market financing for Small and Medium Enterprises (SMEs). In conjunction with a survey infrastructure supported by the Milken Institute, the WFE made three key recommendations to securities market regulators and exchanges:
- The complexity, cost and scale of listing, and maintaining a listing, should be reduced, to incentivize the use of equity markets by SMEs.
- The quality, not the quantity, of information available about SMEs should be enhanced. This includes information that SMEs disclose for regulatory compliance as well as that from third-parties.
- Mechanisms should be introduced to enhance secondary market liquidity in SME stocks and on SME markets, such as: dedicated market makers; expanding and diversifying the investor base; and exploring alternative secondary market trading models such as a quote-driven market.
When I read the WFE report, I couldn’t help but draw parallels between these findings and the unique public market framework we have built at OTC Markets Group to help smaller public companies succeed.