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OTCQX Tier Requirements Update

November 22, 2024 Market Analysis

Enhanced Standards Drive Market Quality

The OTCQX Best Market has implemented significant updates to its tier requirements, effective January 1, 2025, designed to enhance market quality and investor confidence. These changes represent the most comprehensive revision to OTCQX standards in over five years and will impact both current participants and companies seeking to upgrade from lower tiers.

Key Requirement Changes

  • • Minimum bid price increased from $0.25 to $0.50
  • • Enhanced financial reporting standards
  • • Strengthened corporate governance requirements
  • • New investor relations disclosure obligations

Strategic Implications

These enhanced requirements position OTCQX as a more attractive alternative to traditional exchanges for companies seeking public market access without the full regulatory burden of major exchanges. The changes are expected to improve market perception and potentially increase institutional participation in OTCQX securities.

Companies currently on OTCQB or Pink markets should begin preparation immediately if they plan to pursue OTCQX qualification. The enhanced standards require significant advance planning, particularly for corporate governance restructuring and financial reporting system improvements.

Implementation Support

OTC Markets Group has announced enhanced support services for companies navigating the transition, including dedicated compliance consultations and expedited review processes for companies demonstrating early compliance efforts. These support measures are designed to facilitate smooth implementation while maintaining market quality standards.

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Our team specializes in helping companies navigate OTCQX requirements and achieve successful tier advancement.

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gray-900 mb-4">Financial Standards Enhancement

The updated financial standards require OTCQX companies to maintain more robust financial reporting practices. Companies must now provide quarterly financial statements within 45 days of quarter-end, compared to the previous 60-day requirement. Additionally, annual audited financials must be filed within 90 days of fiscal year-end, representing a 30-day acceleration from previous standards.

The minimum bid price increase to $0.50 is designed to reduce volatility and attract more institutional investment. Companies trading below this threshold will have a 180-day compliance period to meet the new requirement, with potential extensions available for companies demonstrating good faith efforts to achieve compliance.

Corporate Governance Strengthening

New corporate governance requirements mandate that OTCQX companies maintain at least two independent directors on their board, regardless of board size. Companies must also establish formal audit committees with at least one financial expert, even if not required by their jurisdiction of incorporation.

Compliance Timeline

Current OTCQX Companies:

12-month compliance period beginning January 1, 2025

New Applicants:

Must meet all requirements at time of application