If your company is listed or contemplating a listing on the Toronto Stock Exchange (the “TSX”) or the TSX Venture Exchange (the “TSXV”) and you are interested in cross-listing the securities of your company on a U.S. stock exchange, there is an alternative to the traditional stock exchange listings on the NYSE or NASDAQ. You may consider supplementing your company’s TSX or TSXV listing with a listing2 on the OTCQX. The OTCQX is not a stock exchange, but is a broker-dealer trading platform. The advantages of listing on the OTCQX include: (1) greater liquidity for investors in both U.S. and Canadian marketplaces; (2) increased transparency for trades executed in the U.S.; and (3) lower costs than listing on a traditional U.S. stock exchange.


The OTCQX heralds itself as the premier tier of the U.S. over-the-counter (the “OTC”) marketplace operated by OTC Markets Group Inc. (“OTC Markets Group”). The OTC market in the U.S. has seen rapid changes over the past few years that have made OTC trading more transparent and efficient. OTC Markets Group developed a number of OTC market tiers for different types of companies: the quality-controlled OTCQX marketplace, the U.S. registered and reporting OTCQB marketplace, and the OTC Pink Sheets marketplace for speculative trading.

Advantages of OTCQX Listing

  1. Greater Liquidity – Canadian issuers may experience significant increases in trading volume after cross-listing on the OTCQX due to trading activity by U.S. investors and brokers via the OTCQX.
  2. Increased Transparency – The OTCQX is a fully electronic trading platform that is similar to the NYSE and NASDAQ and is accessible to all investors – professional and retail. Investors can view real-time quotes online which are publicly available on the website of OTCQX at www.otcqx.com.
  3. Lower Costs – Canadian issuers remain subject to existing disclosure requirements in their jurisdictions rather than being required to file with the Securities and Exchange Commission (the “SEC”).

Listing Requirements

Generally, a Canadian reporting issuer may qualify for a listing on the OTCQX by satisfying OTCQX listing criteria and applicable U.S. securities law requirements. For Canadian reporting issuers, the requirements include financial criteria set by the OTCQX as well as the following:

  • the company must be listed on the TSX or theTSXV for a period of at least 40 days;
  • the company must either (1) have a class of its securities registered under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) or (2) be eligible to rely on the exemption from the Exchange Act registration provided by Rule 12g3-2(b) (the “Rule 12g3-2(b) Exemption”);
  • the company must appoint a Principal American Liaison (“PAL”) sponsor to help with the listing process and conduct an annual review of the company’s posted disclosure. The PAL must be an approved U.S. attorney, investment bank or, if the company plans to list its securities in ADR3 form, an approved ADR Depository; and
  • the company must have proprietary priced quotations published by a market maker in OTC Link (which is an electronic interdealer quotation system operated by OTC Markets Group); and the company must be included in a securities manual published by Standard and Poor’s or Mergent (formerly known as Moody’s).

Listing Process and Costs

Listing applications can generally be completed in approximately four weeks. However, clearance of the Form 211 with the Financial Industry Regulatory Authority OTC Compliance Unit may delay the listing process.

As part of the listing process, the company, which is relying on the Rule 12g3-2(b) Exemption, is required to post, in English, on the OTC Disclosure and News Service, all information required to be made publicly available pursuant to Rule 12g3-2(b) of the Exchange Act for the preceding 24 months.

The fees and costs related to listing generally consist of a non-refundable application fee of US$5,000, an annual fee of US$15,000 (which is pro rated for the first year), fees for a listing in the Standard and Poor’s or Mergent securities manual and professional fees, including fees charged by a PAL sponsor.

Ongoing Requirements

The company must comply with the OTCQX Rules and applicable U.S. securities laws. If the company qualifies for an exemption under Rule 12g3-2(b), the company must (a) maintain its Foreign Private Issuer status as determined by U.S. securities law, (b) continue to list its securities on the TSX or the TSXV, (c) have the TSX or the TSXV as its primary trading market, (d) not register a class of securities or incur reporting obligations under the Exchange Act, and (e) continue to fulfill its disclosure obligations in Canada.

The OTCQX offers Canadian reporting issuers the opportunity to list their securities in the U.S. at a lower cost. Through an OTCQX listing, Canadian reporting issuers can achieve enhanced liquidity in the trading of their securities and can expand their shareholder base.