2014 continues to be a year of great accomplishments for the Exchange for Entrepreneurs. Earlier this month, the Canadian Securities Exchange (CSE) celebrated the achievement of another key milestone by being named to the OTC Markets Group list of qualified foreign stock exchanges, and in doing so, has opened the door to even greater attention and interest from one of the most popular marketplaces in the US.
Specifically, as a result of this designation, CSE-listed companies are now eligible to apply for trading on the OTCQX and the OTCQB marketplaces. Given the scale and popularity of the OTC marketplaces, the news is certainly creating a buzz among investors and issuers in Canada and the US.
Winds of Change
The approval announcement came just a few days ahead of a visit to Canada by the president and CEO of the OTC Markets Group, Cromwell Coulson.
As part of a campaign to raise awareness about the exchange, Coulson strategically selected Vancouver as the location to talk to industry and media because of the significant concentration of venture-stage companies. Like any savvy investor, however, the timing of Coulson’s visit was just right.
With the passage of the Jumpstart Our Business Startups (JOBS) Act in the US, there have been a number of important barriers lifted for “emerging growth” companies to be able to attract early investors. With restrictions on advertising to certain investors lifted and compelling amounts for capital raising allowed under the JOBS exemptions, there may very well be a catalyst for more active deal making to occur especially for junior and venture stage companies.
A Fine Balance
Given the pace of change that is occurring, however, only companies that can keep up with these changes can truly take advantage of them. One way in which companies can move with greater agility, is in the meeting the regulatory disclosure requirements.
The streamlined continuous disclosure model, recognized by the OTC marketplaces as viable reporting structure, will give CSE listed issuers the opportunity to respond more quickly to emerging funding landscape.
As advocates for reducing complexity, the CSE believes growing companies should be able to focus on growing their businesses and ultimately be more agile in the way in which they run themselves.
The Bottom Line: Being a Qualified Foreign Stock Exchange Opens Doors
The acceptance onto the OTC Market’s list of qualified foreign stock exchanges is a great milestone in a year that has already seen so much positive news and interest in the CSE.
Given the alignment of the CSE’s streamlined approach to cost and complexity, it appears that this could provide emerging growth companies with a strategic edge they need to compete in a quickly changing landscape.
For CSE listed issuers interested in finding out more information about the OTC Marketplaces, here are a couple of resources:
OTC Markets Homepage: http://www.otcmarkets.com/home
OTC Markets Group
212.896.4414 – office
518.641.8646 – mobile