over-counter trading tightens reporting, other standards
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[March 27, 2014]
NEW YORK (Reuters) — OTC Markets, the
operator of three U.S. over-the-counter equity markets, is rolling
out tighter reporting standards and eligibility requirements for its
venture-stage market to crack down on stock scams and bolster
transparency, the company said on Wednesday.
On May 1 for its OTCQB market, OTC Markets will introduce a new
minimum one-cent bid price requirement and will require the
company's chief executive or chief financial officer to certify that
its reporting obligations are current and that disclosures about
shareholdings, officers and corporate profile are correct.
The bid requirement, in which stocks must have been quoted for at
least 1 cent daily over a 30-day period or be dropped from the
market, aims to ferret out companies that fall prey to dilutive
stock fraud schemes and promotions, OTC Markets said.
OTC Markets also will charge a one-time $2,500 fee for new
applicants and an annual $10,000 fee for companies trading on its
Foreign companies that are listed on a qualified stock exchange and
are current in their U.S. reporting obligations will be allowed to
trade on OTCQB, OTC Markets' middle-tier marketplace. In the past,
they traded on the lowest "pink" tier.
On Tuesday, the two most actively traded stocks on OTC Markets on
Tuesday were French dairy products maker Danone SA and Swiss
pharmaceuticals Roche Holding AG.
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Trading volume on OTC Markets was 20.1 billion shares on Tuesday,
about three times that of all U.S. stock exchanges and other trading
venues. But the value traded, $1.4 billion, paled in comparison with
the $263.4 billion executed on the other exchanges and venues, data
from BATS Global Markets showed.
(Reporting by Herbert Lash)
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