Clark Wilson LLP appointed as the first Canadian DAD/PAL to act on the OTCQX and OTXQB


Clark Wilson LLP is pleased to announce that the OTC Markets Group Inc. (the “OTC Group”) has appointed it as the first Canadian Designated Advisor for Disclosure (“DAD”) for companies incorporated in the United States, and a Principal American Liaison (“PAL”) for companies incorporated outside of the United States. Until this appointment, the OTC Group had only appointed DAD/PALs if they were domiciled in the United States.

Of the 14 highly accomplished securities lawyers in Clark Wilson’s Corporate Finance & Securities Group, seven are members of at least one U.S. state bar association and have a strong history in practicing in the U.S.

The OTC Group has recently made other changes to the OTCQB, all of which were effective May 1, 2014, intended to align the OTCQB more closely with venture stage markets focused on smaller growth and developing stage companies. Previously, securities were eligible for quotation on the OTCQB market if, among other things, the issuer was a registrant with the Securities and Exchange Commission (the “SEC”) or the Federal Deposit Insurance Corporation (the “FDIC”) and an SEC registered broker–dealer filed a Form 211 with the Financial Industry Regulatory Authority (“FINRA”). Once the new changes are implemented, issuers seeking to trade on OTCQB will be required to meet a new bid price test (of $0.01), file an application with the OTC Group, pay an initial application fee and an annual listing fee, and submit an annual OTCQB Certification signed by the CEO or CFO. In addition, and for the first time, securities of international reporting companies that trade on a qualified foreign exchange (including the Toronto Stock Exchange, the TSX Venture Exchange and the Canadian Securities Exchange) and that are eligible for the SEC’s 12g3–2(b) registration exemption will be eligible for quotation on OTCQB without being required to register with the SEC or the FDIC. As with the OTC Group’s top tier market, the OTCQX, these qualified international reporting companies must be sponsored by a third party investment bank, law firm or ADR Bank that has been approved by the OTC Group to act as a PAL. Approved PALs provide listed international reporting companies with knowledgeable advice about U.S. securities laws.

If you would like to list your company on the OTCQB or the OTCQX markets in the United States, please contact any member of Clark Wilson’s Corporate Finance & Securities Group.

We are also able to assist you in these other areas: Public Offerings and Securities; Regulatory Matters; United States Federal Securities Laws; Technology; Venture Capital; Mergers, Acquisitions and Takeovers; International Business Matters; General Corporate Matters; and Mining and Energy Law.