In November, the federal banking agencies jointly issued a final rule that provides for an optional, simplified measure of capital adequacy, known as the community bank leverage ratio framework (CBLR), for qualifying community banking organizations. The final became effective on January 1, 2020.
As the leading market for 2,000 venture-stage companies, we spend a lot of time working with smaller issuers to solve the challenges they face accessing the benefits of the public markets. For many, having access to the cost-effective capital they need to drive growth and fuel their businesses rises to the top of their priority list. Continue reading “Enhancing the Process of Online Capital Raising”
Many foreign issuers are unaware that there are limitations as to what can be achieved by solely listing in their home (primary) market. At a time of continued uncertainty around fiscal and monetary policies, the influence of geopolitical factors and their impact on the global economy, gaining access to the U.S. capital markets is imperative for many international companies. Now more than ever, companies must consider efﬁcient ways to expand their global footprint and engage a U.S. audience to broaden and diversify their shareholder base. Continue reading “More Efficient Access to U.S. Capital Markets”
Employee Stock Ownership Plans (ESOPs) allow employees to participate in the economic performance of a company, share in corporate profits, and save for retirement. Congress has long recognized the advantages of employee ownership by authorizing and encouraging ESOPs through favorable tax treatment.
However, current IRS regulations significantly restrict the ability of many small public companies not traded on a national securities exchange to offer ESOPs to their employees. These outdated regulations negatively impact hundreds of qualified, U.S.-based companies on the OTCQX and OTCQB markets that collectively employ over 100,000 workers. Continue reading “ESOPs: The Importance of Small Company Employee Ownership”
Born out of the 2012 JOBS Act, Regulation A (Reg A) was amended to provide a streamlined pathway for companies to raise up to $50 Million while benefiting from general solicitation, ‘testing the waters’ and state Blue Sky preemption. SEC reporting companies were originally excluded from using Reg A; however, in January 2019, the SEC adopted new rules to expand Reg A to SEC-reporting companies, enabling public companies to raise capital in a similar manner to a traditional IPO via an S-1 registration or an S-3 shelf registration. Continue reading “Regulation A 2019 Progress Report”
OTC Markets Group recently announced the acquisition of QaravanSM Inc., a leading provider of innovative software and risk & performance analytics tailored to the banking industry.
We sat down with Tony Hodson, now the Senior Vice President of Market Data at OTC Markets Group, to learn more about how bank data and analytics have evolved over time. Continue reading “A Conversation with Qaravan Founder Tony Hodson”
This month we’re pleased to celebrate the 5-year anniversary of the successful launch of OTCQX for Banks. In May 2014, and with ten founding member banks at inception, OTCQX Banks was created to provide U.S. regional and community banks the opportunity to communicate their value proposition through a more cost-effective alternative. OTCQX Banks’ comprise some of the most established institutions, leveraging the OTCQX Market to provide the benefit of the public markets to their investors without the cost and complexity associated with trading on a traditional exchange. Continue reading “May Marks the 5th Anniversary of OTCQX Banks”
Oscar Wilde once wrote that “Everything popular is wrong.” He was describing our natural tendency to find comfort with well-established people and widespread ideas. Regulators, faced with the opportunity to open markets to alternative choices, hear a chorus of respected voices resistant to change. The SEC took until the year 2000 to repeal Rule 390—the rule that gave the New York Stock Exchange a monopoly in trading Blue Chip securities. The principles of open, transparent and connected public markets prevailed.
We raise this as the old idea underlying Rule 390, centralization of trading, is now being pushed as a popular fix for small company liquidity and capital formation. Of course, individual traders are determined to make trades in many different places, which means government intervention would be required to force stock trading back onto the largest stock exchanges. Rent-seeking regulations are often cloaked in the language of “reform” and the public good.
Banking regulation tends to be a partisan issue, but there’s one thing lawmakers are certain to agree on: America’s community banks are the backbone of the country’s economy.
Community banks serve a unique purpose. These institutions make over half of all U.S. small business loans, providing capital to entrepreneurs seeking to start businesses, and the financing needed for local businesses to grow. They provide jobs, help families buy homes and serve as the financial core for communities nationwide. Continue reading “Community Bank Regulations Should Foster Main Street Growth”