OTC Issuer Reporting Standards

In contrast to securities listed on U.S. stock exchanges, securities may trade in the OTC market whether or not they are registered with the SEC.

Companies with securities traded on the OTC market represent a broad and diverse group with a variable level of financial strength, disclosure availability, and management quality. They span all major sectors and industries, and are characterized by market capitalization levels ranging from micro-cap start-ups to large-cap multi-national companies. 

There are three reporting standards that issuers of OTC traded securities can follow to provide disclosure to investors:

• SEC Reporting Standard: Issuers may register a class of their securities with the SEC and comply with SEC reporting requirements.

• International Information Standard: Rule 12g3-2(b) under the Exchange Act (“Rule 12g3-2(b)”) permits non-U.S. companies with securities listed on a non-U.S. exchange to make information publicly available to U.S investors.

• Alternative Reporting Standard: When SEC registration is not required, issuers generally must still make information publicly available pursuant to Rule 10b-5 under the Exchange Act and pursuant to Rule 144(c)(2) under the Securities Act. Pink OTC Markets offers the Alternative Reporting Standard for companies who wish to make material information publicly available.

How can an OTC-traded company follow the Alternative Reporting Standard?

• Pink OTC Markets offers the Alternative Reporting Standard for non-SEC Reporting companies to provide material information to the public via the pinksheets.com website. An Issuer can follow the Alternative Reporting Standard by posting Disclosure, through the OTC Disclosure and News Service, pursuant to Pink OTC Markets Guidelines for Providing Adequate Current Information.

• All Pink Sheets issuers are categorized based on their disclosure to investors. A company that follows the Alternative Reporting Standard and posts a quarterly Attorney Letter, pursuant to Pink OTC Markets' Guidelines for Attorney Letters,will be classified in the Current Information tier on pinksheets.com.

• OTC issuers that demonstrate their commitment to investors by providing timely disclosure and complying with the stringent OTCQX listing requirements are eligible to list their securities on our OTCQX platform.  

How can an OTC-traded company benefit from following the Alternative Reporting Standard?

• A company that follows the Alternative Reporting Standard is providing vital material information to the market through the OTC Disclosure and News Service. A company's level of public disclosure determines the company's classification in the Pink Sheets' Disclosure Tiers, symbolized by the Disclosure Tier icon on that company's profile page on pinksheets.com.

• A company that follows the Alternative Reporting Standard is demonstrating their desire to make full disclosure available to their investors and the markeplace in general. This sort of company is showing the level of commitment they have to their investors by making material information publicly available.

• A company that follows the Alternative Reporting Standard is demostrating compliance with Federal and State securities laws.

• A company that follows the Alternative Reporting Standard is helping to protect affiliates by making material information publicly available to all investors, so as to decrease the risk of violating SEC Rules 10b-5 and 10b5-1 of the Securities and Exchange Act of 1934.

How will following the Alternative Reporting Standard allow you to keep your investors informed?

• A company that follows the Alternative Reporting Standard allows investors to have easy access to any financial disclosure the company provides through the OTC Disclosure and News Service in the company's profile page on pinksheets.com. Investors can see recent financial, officer and shareholder information in one easy location. Providing this information to investors is vitally important in maintaining a good relationship with investors.

• Investors will see the disclosure tier of any Pink Sheets company immediately upon looking up that company on pinksheets.com by the tier icon on the company quote page. An investor can easily see which company follows the Alternative Reporting Standard the second they look up the company quote. Following the Alternative Reporting Standard and posting a quarterly Attorney Letter qualifies a company for the Current Information tier. A company in the Current Information tier is showing they have a desire to keep investors informed.

Alternative Reporting Standard FAQs