From the organizational form of trading, the capital market can be divided into exchange market and over-the-counter market. The over-the-counter market is relative to the exchange market and is a market for securities trading outside the stock exchange.
The physical concepts of the traditional on-site market and off-site market are as follows: the transactions in the exchange market are concentrated in the trading hall; Over-the-counter market, also known as "over-the-counter market" or "over-the-counter market", is a market scattered over the counters of various securities firms, with no centralized trading place and unified trading system. However, with the development of information technology, the way of securities trading has gradually evolved into collecting orders through the network system and then processing them by the electronic trading system, and the physical boundary between the on-market and off-market is gradually blurred.
At present, the concept of on-market and off-market has evolved into the concept of risk stratification management, that is, different levels of markets have made differentiated arrangements for listing or listing conditions, information disclosure system, transaction settlement system, securities product design and investor constraints according to the risk of listed products, thus realizing the vertical stratification of risks of products traded in the capital market.
OTC market in the United States The traditional OTC market in the United States includes OTC (OTC) and traditional PinkSheet. In recent years, it has gradually developed into an OTCMarkets, which consists of OTCQX,OTCQB and OTCPink.
OTC market is a quotation system established by NASD (American Securities Dealers Association) for small companies that can't meet the listing requirements of the three major securities markets in the United States. It is directly supervised by Nasdaq and is an electronic trading system that provides real-time quotation, latest transaction price and volume information for OTC transactions. By providing public information, it can make these securities trade in the legal and good secondary circulation market, and can effectively improve the liquidity and popularity of securities.
Overview of OTC market listing: OTC market listing standard OTC has no fixed listing standard, and any stock company can quote here. However, it is required that the stock issuer must submit the required information disclosure documents to the SEC or the corresponding regulatory authorities, and undertake the obligation of information disclosure such as financial quarterly reports and annual reports. Financial statements and declaration documents must be examined and signed by accountants and lawyers, and all companies quoted in OTC must be sponsored by at least one market maker. If no market maker quotes for the company, the company will be removed from OTC.
Companies listed on OTC are traded on Nasdaq through OTC market, as long as their net assets reach 4 million dollars, their annual profit after tax exceeds 750,000 dollars or their market value reaches 50 million dollars, with more than 300 shareholders and their share price reaches 4 dollars per share; Or meet other standards, you can enter the Nasdaq capital market. Therefore, OTC is also called "the preparatory market for Nasdaq". For example, the world-famous Microsoft, Cisco, etc. were initially listed on OTC, thus developing and growing.
The company is listed on OTC. If it wants to apply for listing on Nasdaq, it only needs to go through the listing procedure for 6-8 weeks, instead of the registration procedure and public offering procedure of the US Securities and Exchange Commission (SEC). Compared with the conventional methods such as IPO, the procedure is very convenient. Because the company listed on OTC is already a public company in the United States and meets all the requirements of the US Securities Regulatory Commission for public companies, there is no separate approval process of the US Securities Regulatory Commission. At the same time, listing is not a fund-raising process.
The process of listing on OTC and realizing Nasdaq listing in the United States 1) Hire listing consultants and sign relevant agreements;
2) Sign an agreement to purchase shell companies or register overseas companies;
3) handle foreign exchange registration with the domestic foreign exchange administration department (if applicable);
4) Change the list of shareholders and directors of the shell company;
5) The shell company or overseas newly established company returns to merge and acquire the domestic listed company (if applicable);
6) To change the foreign exchange registration certificate or foreign exchange registration form with the foreign exchange administration department (if applicable);
7) Hire independent auditors to audit domestic companies;
8) Hire a lawyer recognized by the Securities and Exchange Commission (SEC) to issue a lawyer's letter;
9) Apply to the SEC item by item;
10) accept all kinds of questions raised by the SEC and reply;
1 1) was approved by the SEC;
12) Confirm or change market makers (at least one market maker in OTC stage);
13) issue additional shares;
14) the operation of the secondary stock market, so that the stock market value or stock market price can meet the requirements of Nasdaq listing;
15) Apply to Nasdaq for stock listing and trading if it meets the listing requirements of Nasdaq.
The cost of listing on OTC market in the United States. Most Chinese mainland companies that land in OTC adopt the method of listing by shell, which is favored by small and medium-sized enterprises in the mainland for its short time and high success rate. However, if you are not in a hurry to list on OTC, listing by shell can save a lot of money for buying shells, but some uncertainties may increase accordingly.
OTC's information disclosure requires that the issuer need not report to NASDAQ Market Company or NASD or fulfill its disclosure obligations. However, all stock issuers quoted in OTC should regularly perform their disclosure duties to the US SEC or other regulatory agencies. The issuer shall report the major events of the company before the effective date, including merger, acquisition, name change, details of all major events and relevant documents. The issuer must submit the information about stock splitting, stock merging, dividend distribution or other distribution to the OTC coordinator 10 days in advance. If the declaration is overdue, it may lead to delisting.