An OTC exchange listing works similarly to other listings. However, its listing requirements aren’t as strict as what you’ll find elsewhere. Since it was founded, the OTC Markets Group has run the exchange. As an over-the-counter exchange, it’s much easier to list your company on it. So, many companies have listed their stock after being rejected by others.
What Is an OTC Exchange Listing?
If a company has its stock listed on its exchange, it is an OTC listing. To get on their exchange, you must pass certain requirements. But, their requirements aren’t as difficult to pass as the ones used by the NYSE. For example, you only need $5 million of tangible assets. If you’ve been open more than 3 years, that drops down to $2 million.
You can also use your company’s revenue to qualify, too. So, if you’ve brought in at least $6 million in revenue, you can be listed. After listing a company, it has to maintain a market cap above $10 million. If it has less than that, it won’t qualify, either.
Also, the SEC has to manage everything on the exchange. So, you must comply with anything they’ve asked of you, too. After issuing stock, the company has to have at least 50 shareholders as well. If it has fewer, it’s ineligible to go on the exchange.
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