Pink Sheets Introduces OTCQX -- A New Premium Listing Service
Pink Sheets Introduces OTCQX -- A New Premium Listing Service for OTC Securities
Designed to Meet the Particular Needs of Smaller Public Companies and Foreign Stock Exchange-Listed Companies in a Post-Sarbanes-Oxley Environment
NEW YORK, NY -- (MARKET WIRE) -- 03/16/06 -- Pink Sheets, LLC today announced the introduction of OTCQX(SM), a new tiered listing service that offers a premier trading, quotation and disclosure venue for over-the-counter (OTC) securities in the US markets. The OTCQX premium service provides issuers with an efficient and robust platform to list their securities and access secondary market liquidity. It also offers OTC investors a select list of quality-oriented domestic and foreign stocks that provide regular financial disclosure.
OTCQX is designed to meet the needs of a diverse group of issuers including:
-- Existing domestic issuers trading in the OTC market that are seeking premium status and that have the ability to efficiently disclose financial results to investors; -- Smaller companies currently listed on NYSE, AMEX or Nasdaq that are looking for a reporting mechanism more customized to their needs, while continuing to provide secondary market liquidity and transparency to their current investors; -- Venture-backed growth companies that do not yet have the scale of operations for an exchange listing but wish to offer enhanced liquidity to current investors; and -- Foreign exchange-listed companies seeking access to the deep pools of institutional and retail liquidity in the US equity markets, while using the 12g3-2b exemption to protect themselves against an involuntary, mandatory SEC registration
The increased costs associated with Sarbanes-Oxley compliance are motivating many smaller and growth-oriented companies to reconsider the viability of listing on traditional exchanges. "OTCQX will provide a compelling alternative for those companies that wish to provide their shareholders with the liquidity and transparent disclosure of a premier OTC listing, but in a more flexible regulatory environment that is suitable to the needs of smaller and foreign issuers," said Cromwell Coulson, president and CEO of Pink Sheets LLC. "OTCQX also effectively raises the overall standard of OTC securities as a viable investment vehicle by enhancing the quantity and quality of disclosure they provide to investors.
The OTCQX trading platform will feature two distinct tiers, PremierQX(SM) and PrimeQX(SM), designed to showcase solid operating companies with audited financials that can meet certain minimum requirements and provide ongoing disclosure.
PremierQX, the highest tier, identifies issuers that are of the size and quality to be listed on a National Stock Exchange, hold annual shareholders' meetings, and that have a minimum bid price of $1;
PrimeQX identifies those issuers that are operating companies with audited financials, but not of sufficient size to be on PremierQX.
Every OTCQX-listed company must also have a Designated Advisor for Disclosure ("DAD") to assist them in providing adequate current information and advise the issuer on meeting the requirements for inclusion in the tier. The DAD, modeled after the highly successful Nominated Advisor (NOMAD) of the London Stock Exchange's AIM market, relies upon the securities attorneys and investment bankers who normally serve as the primary capital markets advisors to OTC companies.
The DAD requirement introduces to U.S. investors the protections of a professional "gatekeeper" for secondary market disclosure. The DAD for an OTCQX-listed company will be required to participate in the preparation of the company's disclosure statements and prevent issuers with inadequate or questionable disclosure from joining OTCQX. This third party independent review by securities market professionals should enhance investor confidence in OTCQX-listed securities.
Every OTCQX-listed company will be required to meet defined standards, including:
-- Ongoing quarterly and annual financial reports posted on OTCQX.com, a premier web disclosure portal for qualifying OTC securities -- Interim material event disclosure of any information that may affect the share price -- Annual audit -- Management disclosure and annual management certification -- 100 round lot shareholders -- Ongoing operations (no shells, blank check, or special purpose acquisition companies) -- Inclusion in the S&P or Mergent Manual, which satisfies the Blue Sky requirements for secondary transactions in many states
"By limiting OTCQX to operating companies with audited financials and professional advice, we believe the OTCQX premium tiers will provide a substantially better home for smaller companies that are currently considering listing on the AIM or OTC Bulletin Board," commented Coulson. "Foreign exchange-listed issuers will also find substantial advantages through our expedited disclosure process. The US equity markets remain the broadest and deepest in the world, and OTCQX leverages the Pink Sheets' scalable quotation and trading platform that is used for all OTC stocks with nearly 200 participating broker-dealers."
Currently there are nearly 5,000 OTC securities quoted in Pink Sheets including Mercury Interactive Corp. (OTC: MERQ), Nestle SA (OTC: NSRGY), Heineken NV (OTC: HINKY), Lukoil (OTC: LUKOF), Vivendi Universal SA (OTC: VVDUF) and Volkswagen AG (OTC: VLKAY).
As part of the listing, OTCQX issuers will be provided with a comprehensive suite of complimentary services and access to an array of data products, research resources and Investor Relations and Public Relations capabilities. This includes: the Pink Sheets News Service for publishing financial reports and news releases, real-time Level II quotes available free to the public, and a subscription to OTCQuote.com, a web-based service providing real-time and historical quote information for all Pink Sheets stocks.
An alternative to listing on traditional exchanges, OTCQX is a new premium listing service for issuers of securities that are traded over-the-counter (OTC). The OTCQX trading, quotation and disclosure platform, comprised of the PremierQX(SM) and PrimeQX(SM) tiers, is designed to distinguish strong public companies from the nearly tens of thousands of securities traded OTC. Additional information is available on www.otcqx.com.
About Pink Sheets, LLC
Pink Sheets, LLC is the leading provider of pricing and financial information for the over-the-counter (OTC) securities markets. Its centralized information network includes services designed to benefit market makers, issuers, brokers and OTC investors. Pink Sheets information enhances the efficiency of OTC trading, provides better executions for OTC investors and improves the capital formation process for OTC issuers. For more information visit the Pink Sheets website at www.pinksheets.com.
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