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SUMMARY
Launched in 2007, the OTCQX (“QX”) is currently the premier tier of
the U.S. Over-the-Counter (“OTC”) marketplace. The QX was created
specifically for the purpose of providing foreign companies access
to the U.S. capital trading markets and to attract U.S. investment
capital. International companies now have the platform to tap into
the vast U.S. retail markets by a companion listing on QX by
maintaining their home exchange listing.
A major benefit
to a foreign issuer is that a QX listing does not require compliance
with Sarbanes-Oxley, U.S. GAAP financial statements and numerous
Exchange Act reports. In addition, the QX listing allows U.S.
investors to trade and invest in foreign companies which were
previously unavailable due to internal controls, the inability to
access foreign exchanges, or delay due to currency conversion
issues. As a result, the QX has experienced significant growth over
the last two years and now is home to over 150 public companies
which are dual-listed, including Air France, Adidas, BNP Paribas,
and Zurich Financial Services.
To qualify for
the QX, a company must meet certain standards including a listing on
a qualified foreign exchange, maintaining minimum asset and net
worth valuations and publishing certain disclosure information in
English on its website or other electronic information delivery
system generally available to the public. Initially, QX applicants
pay a minimum application fee of $5,000 to establish the listing and
an annual listing fee of $15,000 as compared to listing fees and
associated costs on the NYSE or NASDAQ which can reach in excess of
$500,000.
To assist in the
listing process, each foreign issuer must retain the services of a
Principal American Liaison (“PAL”) to prepare the QX application and
advise the company of its obligations under the QX rules and
Securities and Exchange Commission regulations. Likewise, the PAL
is responsible for oversight of company disclosure documents and the
annual renewal of the application for continued listing. The PAL is
the company’s direct link to the QX and assists with state blue sky
compliance.
Berenbaum
Weinshienk PC currently serves as the PAL representative for over 26
foreign issuers with asset valuations in excess of $500 million
dollars. We advise foreign issuers on cross-border financing
transactions, both on a private or fully registered basis. Members
of the securities department also advise on exempt offerings under
Regulation S or traditional Rule 506 private transactions.
If you wish
additional information concerning QX listings or any other form of
U.S. exchange listing or financing transactions, contact Victoria
Bantz at (303) 592-8337 or John Wills at (303) 592-8360. The Firm’s
website may be viewed at
www.bw-legal.com
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