An OTC listing conforms to the requirements set by OTC Markets Group. Formerly known as National Quotation Bureau, they’ve developed their own listing requirements. To list anything on their exchange, it has to conform to them. Otherwise, they’re not going to allow you to have it listed on theirs. Typically, if something is on there, it’s not traded on formal exchanges, too.
What Does Everyone Need to Know About an OTC Listing?
Instead of trading on a typical exchange, some are passed around on dealer networks. Among the most prominent, OTC Market Group limits how much is done of their exchange to keep it simple. Even though they may not be equivalent to stock exchanges, the SEC still regulates them. FINRA takes a role in regulating the OTC exchange as well.
What Are the Listing Requirements
Assuming you’ve built a company, you may list its shares on the OTC exchange. But, it has to meet certain requirements before becoming a part of it. One of the simplest is the net tangible asset requirement. If you’ve been in business more than 3 years, you must have $2 million. Anything less than that would disqualify you from being on their exchange, unfortunately. For companies with less than 3 years of history, they must have $5 million. Also, the company has to bring in at least $500,000 in yearly revenue.
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