OTCQX
Candlefocus EditorBecoming listed on the OTCQX is an prestigious accomplishment for companies who are not traded on traditional exchanges, affording investors an extra layer of security and transparency. To be eligible for OTCQX, companies must meet certain qualifications. This includes: a minimum bid price of $0.01 per share, a minimum of 400 shareholders of record with a market value of public float of at least $500,000 and 6 months of reporting history. Further, the company must have a minimum PCAOB-qualified audit firm serve as its auditor and meet other criteria.
Once a company has been enrolled into the OTCQX it will have its own page on the OTC Markets website where all of its relevant regulatory disclosures and financial information can be accessed. Companies listed on the OTCQX are also assigned a Designated Advisor for Disclosure (DAD) who helps guide them through the disclosure requirements of OTCQX and provides regulatory counsel.
Investors should be aware that stocks listed on both the OTCQX and OTCQB (formerly the OTCBB) are not SEC-registered penny stocks and thus there may be additional risks associated with trading them. This is because OTC-traded securities are not as regulated as stocks traded on traditional exchanges and may be more susceptible to manipulation. As such, it is important for investors to do their due diligence before investing in any OTC-traded security.
In conclusion, OTCQX is the top tier for OTC makes in the US and provides a higher level of disclosure, reporting and transparency than the other two OTC markets (OTCQB and Pink Sheets). For companies looking to list on OTCQX, they must meet certain criteria and be subject to extra SEC regulation. Trading in such stocks carries additional risks and investors should do their own due diligence before investing.