FINRA Ticker Symbol Applications and OTCBB/OTC Markets Compliance
Securities trading in newly public corporations usually begins in the over-the-counter markets, with the most important of these being the OTC Bulletin Board (OTCBB) and the OTC Markets. In order to trade through these markets, the company must obtain a ticker symbol through having a market maker (broker) file a Form 211 application to the Financial Industry Regulatory Authority, or FINRA.
For comprehensive client service in your FINRA application, contact our offices in New York. G&P securities lawyers can assist with the FINRA application process, present a complete and thoroughly documented package, recommend a market maker to submit the application, and respond as necessary to comments or questions from FINRA's OTC compliance examiners during the application review process.
The first step in trading shares through OTC markets is to become an SEC reporting company, which for many issuers involves filing an SEC registration statement on Form S-1, S-3 or S-8 and compliance with SEC annual and quarterly reporting requirements through Forms 10-K and 10-Q. The FINRA Form 211 process to obtain a ticker symbol is typically the last step on the path toward trading a company's securities on the OTC markets.
Comprehensive Client Service in Getting Listed on OTCBB/OTC Markets
The Form 211 filing process represents FINRA's approach to compliance with SEC Rule 15c2-11, which holds regulated securities brokers and dealers responsible for documenting a reasonable basis to believe the accuracy "in all material respects" of certain detailed information about the issuer.
This information to some extent serves the same function as the data that appears in a prospectus and an annual report. More specifically, the FINRA review process will especially emphasize the circumstances of the offering and sale, the viability of a market for free-trading shares, and proof that the issuer is not a "shell" that lacks substantial business operations.
The SEC's recent approval of Nasdaq's new BX Venture Market gives companies an additional option for listing and trading over-the-counter securities. Nasdaq BX will launch later in 2011, and G&P can help companies qualify for this alternative when the eligibility criteria come into focus.
Form 211 applications are filed by market makers on behalf of the corporate issuer. The market maker is a broker-dealer ready and able to buy and sell a minimum number of shares of the security to be traded. As your legal adviser throughout the FINRA application process, we will work closely with the market maker, the issuer's transfer agent and other parties who play indispensable roles in bringing your securities to market.
When FINRA approves the Form 211 filing, your corporate securities will be eligible for trading on the OTCBB, OTC Markets or Nasdaq BX under your own trading symbol, which can be requested. To learn more about the ways experienced attorneys can save time, expense and uncertainty throughout this process, contact Gottbetter & Partners in New York City.
