The OTCQX, owned by OTC Markets, Inc., announced last week that they are increasing their listing and governance requirements effective January 1. The QX is the highest tier of trading among the OTC options. There will now be a higher initial bid price of $0.25 to trade on the OTCQX US tier. US companies on the QX will have to keep a price above $0.10. International companies will be required to meet new initial and ongoing minimum bid prices of $0.25 and $0.10 to trade on the OTCQX International tier. Both US and international companies will have higher initial and ongoing market capitalizations of $10 million and $5 million, respectively. All companies will now be required to have at least two market makers.
In addition, there are new minimum corporate governance requirements for American companies on the QX. These are: a minimum of two independent directors on the board of directors; an audit committee composed of a majority of independent directors; and they must conduct annual shareholders’ meetings and submit annual financial reports to shareholders at least 15 calendar days prior to such meetings. They also added even more stringent new requirements for the higher level “premier” tier on the QX.
In their announcement, OTC Markets CEO Cromwell Coulson acknowledged the purpose of these changes is to strengthen the legitimacy of the QX and get more attention from investors, Wall Street firms, and analysts for these companies. My take: all good stuff!
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