Joe Coveney om OTC Markets och cross border-trading

October 26, 2020 Oskar Larsson

OTC-handel (Over the Counter) i USA är en marknad som nordiska börsbolag kan använda sig av även om man inte är noterad på de amerikanska börserna. Hur funkar det och vad ska man tänka på för att locka amerikanska investerare? Vi har intervjuat Joe Coveney, VP International Corporate Services på OTC Markets, om hur det fungerar, vilka trösklar som finns för att komma igång och varför detta är bra för nordiska börsnoterade bolag. Intervjun återges på engelska. 

What is OTC Markets and how does it work?

OTC Markets operates the U.S. equity market for securities not listed on a national exchange.  There are 11,000 U.S. and global securities that trade on our markets – which are segmented based on the level of their financial strength and disclosure.  We operate the OTCQX Best Market, the OTCQB Venture Market, and the PINK Open Market. Our mission is to create better informed and more efficient financial markets and to provide liquidity, execution services for brokers and investors and to empower companies to the improve the quality of information available to all market participants.

What are the main benefits of trading their stock in the US for European companies?

The main benefit for European or Nordic companies who trade on our markets are that they now have a freely tradeable security, with a U.S. ticker symbol and a USD share quote, that is available to all U.S. investors, through their U.S. broker of choice.  Most importantly, Nordic companies can accomplish this without having to do any additional U.S. regulatory or legal work.

OTC Markets gets to utilize a special SEC exemption, rule 12g32-b, which allows companies listed on Foreign Markets, to cross-trade on OTC utilizing their home market disclosure – so long as it is made available in English. That means that companies who are already public on the Nasdaq Nordic, First North, Oslo Bors, Spotlight Stock Market, etc. are not required to do SEC filings or registration, no Sarbanes Oxley Compliance, no US GAAP reconciliation, etc., – eliminating the most challenging or burdensome regulatory obligations required by US exchanges.

Is cross-border trading as complicated as it may sound?

No, not at all. This process is simple, cost effective, and efficient.  This is further evidenced by the hundreds of companies from around the world, including some of the largest and most well-known brands such as Adidas, Heineken, Roche, BNP Paribas, Hugo Boss, etc., that trade on our OTCQX and OTCQB Markets.

As a European company, what infrastructure do you need to have in place in order to get started with cross-trading?

As long as you are public on a quailed foreign exchange you have an opportunity to cross-trade on our markets and reap the benefits of better trading volume, enhanced liquidity, improved valuation, and U.S. shareholder growth. Our stock market benefits any Nordic company that has a U.S. interest, whether it be, customers, employees, operations, growth targets, etc. Having a verified U.S. stock market to support your goals and initiatives is a valuable strategic asset.

How can Nordic companies generate US investor demand and increase visibility to the market?

OTCQX and OTCQB data is fed through all major U.S. data distributors, media outlets, and various research platforms and portals helping issuers engage a far greater network of U.S. investors than companies without a quotation on our marketplace. Additionally, we have a variety of complimentary investor relations tools that are included with your OTCQX/QB membership including: CEO Video Interviews, Podcasts, Market Open ceremonies, Virtual Investor Conferences – all designed to help companies maximize their visibility and tell their story to the broadest potential investor audience possible.

Is it really a good idea to considering cross-trading on your market right now?

Yes! one of the unique traits of the U.S. equity market is the diversity of our shareholders. Smaller institutions, U.S. retail and family offices comprise a significant proportion of the equity market which tends to be the most sticky – meaning they are long-term shareholders. Our market opens up Nordic issuers to all U.S. investors, from large institutions to retail investors. U.S. investors prefer trading in US dollars, during US market hours, with US ticker symbols – OTC Markets provides that opportunity for Nordic companies.

What is your no.1 advice to companies thinking about starting cross-border trading with OTC?

In order for a company to succeed, you need to maximize your chances for opportunity – most U.S. investors, including many institutions, can’t buy Nordic stocks or foreign listed securities.  Our marketplace immediately solves for that problem and opens the door for additional growth and investor access. Please feel free to contact me directly to discuss the simple and easy admission process and/or reach out to one of our approved Nordic OTC Sponsors including: Arctic Securities, Advokatfirmaet Raeder, or BKH Law to learn more.

Vill du veta mer om OTC Markets och hur det lämpar sig för nordisk verksamhet? Lyssna på vårt podcastasvnitt där Joe Coveney gästar och utvecklar om OTC Markets.

About the Author

Oskar Larsson

Content Marketing Manager at Cision Nordics, mostly covering topics related to IR and Corporate Communications

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