In sociology, a “tipping point” is the event of a previously rare phenomenon becoming rapidly and dramatically more common. In general, it is a level at which the momentum of change becomes unstoppable. OTC Markets began many years ago with the scale heavily weighted against them, but as time has gone on, a reputation has been established and the number of listing companies continues to increase. It is reaching a tipping point.
Some of the few large companies already trading on the OTCQX include adidas (listed in November 2007), BASF (listed since December 2007), easyJet Plc. (listed October 2009), Gazprom Neft (listed August 2009), Imperial Tobacco Group PLC (listed September 2008), Peugeot S.A. (listed April 2009), Roche Holding Ltd (listed November 2007) and Wal-Mart De Mexico S.A.B. de C.V. (listed March 2007). The market cap of these companies exceeds $265 billion. These companies realized the benefits of OTCQX and helped establish the foundation by providing credibility to the platform OTC Markets had been diligently developing.
In this month alone, OTC Markets has seen an influx of large, established international companies to have their applications approved to be on the OTCQX. Grupo Financiero Banorte, S.A.B. De C.V., a commercial bank from Mexico with a nearly $8 billion market cap is the latest listing on the OTCQX Premier tier with listing starting on July 15, 2010. BNP Paribas, the largest bank in France, brought its $77 billion market cap to the OTCQX when it began being listed the day before on July 14th. Zurich Financial Services Ltd. and its $34 billion market cap began trading on the OTCQX on July 1st. Three weeks ago, at the end of June, Deutsche Telekom, the German telephone giant with a market cap of $55 billion joined the OTCQX.
In a conversation with Tim Ryan, Managing Director, Sales and Business Development for Pink OTC Markets, Inc., Mr. Ryan commented, “The momentum created by our development has been steadily building upon itself. As with any great progression, it takes time to establish trust, reliability and a reputation within the industry. But we have consistently proven the benefits of our platform in the three years since launching OTCQX and are now being approached more regularly by large and small corporations alike that want to learn about the benefits of OTCQX.”
The list of OTCQX is comprised of two levels, the OTCQX and the OTCQX Premier, the latter carrying listing requirements that parallel the continued listed requirements of a U.S. exchange. While the requirements are similar, the cost is not. Being listed on the OTCQX Premier level only carries a yearly flat fee that is far less than the NYSE or Nasdaq costs and is not calculated based on share structure. OTC Markets also recognizes the high-quality disclosure that large corporations provide on their home market and gives companies a mechanism to distribute that disclosure in English to U.S. investors. Unlike a traditional US exchange, OTCQX does not require companies to provide a second set of disclosure with the SEC, which allows companies to avoid the SOX 404 regulations that have been critiqued as over exaggerated and too burdensome.
The number of OTCQX listed companies has now risen to 115, with 55 of those companies qualifying as OTCQX Premiere. The combined market cap of the 118 companies is approaching $1 trillion, which attests to the magnitude and strength of the companies listed on the OTCQX. As the momentum is building and the tipping point is nearly approached, it appears that OTC Markets will continue to be the choice for more and more companies wishing to gain greater exposure, conserve finances and provide shareholders the transparency that they desire. What naturally had to start slow is gaining steam as the desire to add order and give legitimacy to the OTC is gradually being achieved by the growth of OTCQX.
More information on Pink OTC Markets, their platforms, listing requirements and benefits can be found on the Company’s website at www.otcmarkets.com.