During times of uncertainty, many company executives find themselves evaluating their initiatives, priorities and expenses through a new lens.  In recent months, we’ve spoken with management teams as they wrestle with whether it makes sense to maintain their exchange listing on NASDAQ or NYSE, given the cost and complexity it creates for their teams.

As a market operator that provides established public markets for thousands of companies, we understand the importance of providing transparent and efficient public markets that work for both your company and your investors.

The benefits that continue to make our markets a compelling alternative to an exchange listing are evidenced by our history of successfully transitioning companies to the OTCQX and OTCQB market – many of whom are able to reduce the $1 – $2 million in annual costs associated with being publicly listed on a national exchange.  By providing scalable solutions, we offer companies more options to maintain shareholder value and continue their growth trajectory.

The following are answers to some of the most frequently asked questions we receive:

Which public market is best suited to meet my company’s needs?

The OTCQX and OTCQB Markets provide agile, efficient, and compliant public trading solutions that tailor qualifications to align with company needs. Our approach gives companies additional options to provide current information to investors. Both are SEC-recognized established public markets that offer viable alternatives for qualified companies to maintain their public quotation–prioritizing investor transparency through disclosure without the complexity of an exchange listing.

The OTCQX Best Market is a home for established companies that meet the highest level of financial standards.  The OTCQB Venture Market provides a transparent and regulated public market for early-stage, entrepreneurial companies as well as larger companies facing financial challenges.

The Pink Open Market is the default for companies that have filed for bankruptcy or unable to provide continuing financial disclosure due to financial mismanagement. While Pink provides a public market for outside investors to sell their shares, many brokers restrict access to Pink securities because of heightened investment risks.

How can companies benefit from trading on the OTCQX or OTCQB Markets?

Less complex and less burdensome market standards allow OTC Markets-traded companies to allocate time and resources to strategic planning and building financial infrastructures. For executives tasked with the responsibility of satisfying exchange requirements, these efficiencies help alleviate stress and remove unnecessary constraints. This is especially crucial for companies that may not be able to meet one of the exchanges’ financial or price standards — which has been the case during the pandemic. By getting ahead of the process, companies can avoid hiring expensive advisors and lengthy listings qualification hearings.

Importantly, companies who choose to voluntarily delist and move to the OTCQX and OTCQB markets are still traded electronically by the same market makers as their securities would trade on an exchange.  Investors benefit from the same level of price discovery and trading experience.

How does my company make the transition?

The team at OTC Markets Group is here to answer questions, discuss your options, and share other companies’ experiences. With an understanding that there are other options available, we can help facilitate a seamless transition to a more affordable and less painful public market. We benefit from our experience working with companies of all sizes, industries, and geographies– ranging from innovative, early-stage and venture companies, to U.S. community banks and foreign exchange-listed global brands.  Our strength lies in engaging issuers to provide tangible benefits through a broad range of visibility offerings, communications services, and IR support.

Uncertain times present new challenges–financial and otherwise–to every enterprise. The key to surmounting these challenges is flexibility when it comes to building value, maintaining a strategic growth path and offering liquidity. Businesses need a range of options as they explore strategies for growth, and OTC Markets Group is proud to offer more efficient, cost-effective solutions that meet the needs of today’s companies.

 

Joseph Oltmanns is a Senior Vice President, leading the Domestic Corporate Services team at OTC Markets Group. In this role, he educates companies on their alternatives to listing on a national exchange while reducing costs and maximizing investor engagement. Prior to OTC Markets, Joe held multiple positions at NYSE American including listing qualifications, market surveillance and new business development. Joe has an MBA from Fordham University and a BS from Villanova University.