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The Initial Public Offering (IPO) Introduction

The Initial Public Offering (IPO) Introduction

Definition: A company’s first equity issue made available to the public.

Going public is a monumental decision for any company. It forever changes how a company goes about doing business. A public company has access to more, and often deeper, sources of capital than a private company. The actual process of going public can be time-consuming and presents certain unique challenges that a company should be prepared to undertake.

Why do companies go public?

New capitalAlmost all companies go public primarily because they need money to expand the business.

Increased capital. Raised capital can be used as working capital, acquisitions, research and development, marketing, and expanding plant and equipment.

Future capital. Once public, firms have greater and easier access to capital in the future

International recognition

Liquidation of the shares of the company so that the founders and the rest of the existing shareholders will be able to “cash out“.

Expansion of the company into new territories not only by means of more funding, but also by regulatory or marketing reasons . Being public is associated with credibility and accountability.

Mergers and acquisitions

  • Its easier for other companies to notice and evaluate a public firm for potential synergies
  • IPOs are often used to finance acquisitions
  • Expansion of the company either by acquisition or merger.

Transparency, accountability and credibility

To attract and retain talented employees and enhance the company talents pool or human capital development.

Disadvantages of the IPO

A typical firm may spend about 15-25% of the money raised on direct expenses

Reporting responsibilities
Public companies must continuously file reports with the Security Commission and the stock exchange they list on

Loss of control
Ownership is transferred to outsiders who can take control and even fire the entrepreneur

Is it a good time to do an IPO?

There are clear “windows of opportunity” that open and close for IPO issuers

Determinants of suitability:

  • The general stock market condition
  • The industry market condition
  • The frequency and size of all IPO’s in the financial cycle

What sort of qualifying criteria?

  • An attractive product or service, preferably one with a competitive advantage and sufficiently large market;
  • An experienced management team;
  • A positive trend of historical financial results;
  • Favourable financial prospects;
  • A well-thought-out, focused business plan;
  • Strong financial, operational, and compliance controls.

Outline of the IPO process:

  1. Select an underwriter & merchant banker
  2. Appoint the reporting accountant and legal counsel for due diligence
  3. Register IPO with the Securities Commission
  4. Print prospectus
  5. Present roadshow for book building
  6. Price the securities
  7. Sell the securities

Pre-IPO Preparation

Key Elements of a Successful Listing:

Moving a privately owned company to a public market will take time and detailed planning is required. In accounting terms the key elements for success are:

  • Sound and effective financial controls
  • Timely and accurate management reporting
  • An experienced CFO
  • IFRS, US or suitable national GAAP compliant audited financial statements
  • Realistic and supportable financial projections
  • Taxation planning will be required at an early stage for the company and shareholders

In commercial terms, a successful IPO candidate must demonstrate Quality, Good Governance and Value.

What are Investors Looking For?

  • A growing business operating in an expanding markets
  • International exposure or potential to expand overseas
  • Sustainable competitive position
  • Visibility of earnings
  • Quality of earnings
  • A committed and experienced management team
  • A commitment to strong corporate governance procedures
  • Sector approach based on macroeconomic factors

How To Become Investor Ready

Improve the “quality” of your profits by:

  • A strong and complete management team with clear succession planning
  • A scalable business model, growing organically or by acquisition
  • A move to higher value and higher margin products
  • Build barriers to entry based on technical excellence, market knowledge or scale
  • Robust and reliable accounting and management information system
  • Enhance corporate governance and appoint non-executive directors early
  • Capital restructuring or reorganisation, consider share incentives, regulatory approvals
  • Build defendable rights over intellectual property
  • Dispose of non-core activities and assets
  • Identify strategic acquisitions and mergers
  • Adopt International Financial Reporting Standards or local equivalent
  • International Audit Standards Compliance
  • Tax review of compliance and planning issues, national and international
  • Reduce dependence on particular customers, products, suppliers or staff
  • Review terms of trade and strengthen credit management
  • Appoint experienced advisers

IPO Capital Structure

Use of an offshore Listco – decision based upon:

  • Reputation
  • Skill pool
  • Tax transparency
  • Flexible corporate laws

Other considerations

  • Takeover code
  • Uncertificated shares
  • Pre-emption rights
  • Shareholder disclosure
  • Geography

Overall choice

  • Make it easy for new investors to invest and understand


1 Demonstrate Quality, Good Governance and Value

2. Moving a privately owned company to a public market will take time, detailed planning is required

3. Increasing the “Quality” of profits will increase the value of your business

4. The value of the business on IPO is less important than the value 12 months later, do not over value

5. Admission to a market is the start of a process, not the end

6. Liquidity and valuations must be developed – “Invest time and effort in the market and the market will invest in you”

IPO vs. Direct Listing: What’s the Difference?

IPO vs. Direct Listing: An Overview

Companies seeking to raise interest-free capital from the public mostly take the initial public offering – IPO route to publicly list their shares on stock exchanges. The public listing represents the first instance of a company selling its shares to common investors.

There are two ways to list the shares—first, the standard and popular IPO process, and second, the direct listing process. This article explores the difference between the two.

Initial Public Offering – IPO

In most cases, the shares listing process is performed by the company by using the services of intermediaries called underwriters, who facilitate the IPO process and charge a commission for their work.

IPO underwriters are financial experts who help the company go public. They work closely with it to perform various functions which include deciding the initial offer price of the shares to be sold, helping with regulatory requirements, buying the shares from the company, and then selling them to the various investors via their distribution networks.

Their network comprises investment banks, broker-dealers, mutual funds, and insurance companies. The interest received from the network participants helps the underwriters set a realistic IPO price of the stock. Underwriters may also provide a guarantee of sale for a specified number of stocks at the initial price, and may also purchase anything in excess.

Underwriters charge a fee for their services, which may range anywhere from 2% to 8%. This means that a significant portion of the capital raised through the IPO exercise goes to such intermediaries. It is a cost to both the company and to investors, as the company receives lower capital and investors get the shares at a higher price.

Essentially, while the underwriters and other involved parties take care of the major portion of the end-to-end share listing process, it comes at a high cost.

Direct Listing Process (DLP)

Smaller companies or startups that want to do a public listing may not have the resources to pay the high costs to underwriters or may not want to pay those costs. Such entities often choose to proceed by using the direct listing process, a less-expensive alternative to an IPO.

DLP is also known as Direct Placement, or Direct Public Offering – DPO. In DLP, the business sells shares directly to the public without the help of any intermediaries. It does not involve any underwriters or other intermediaries, there are no new shares issued, and there is no lock-up period.

The existing investors, promoters, and even employees holding shares of the company can directly sell their shares to the public. The process is considered to be more democratic and decentralized.

However, the zero- to low-cost advantage also comes with certain risks for the company, which also percolates down to the stock investors. There is no support or guarantee for the share sale, no promotions, no safe long-term investors, no possibility of options like greenshoe, and no defense by large shareholders against any volatility in the share price during and after the share listing. The greenshoe option is a provision in an underwriting agreement that grants the underwriter the right to sell investors more shares than originally planned by the issuer if the demand for a security issue proves particularly strong.

IPO vs. Direct Listing Example

While many small-sized startups in the technology and biotech sectors have used the DLP process for a share listing in the recent past, the news of Spotify’s massive public listing filing for the DLP route has made headlines.

Reuters calculations value Spotify at around $19 billion. Despite being considered a unicorn, a large entity like Spotify going for a direct listing of shares is seen as setting new benchmarks for the listing process, which may see more mid- and large-sized organizations going the DLP route in the future.


How An RTO Achieves A Win-Win For All

A reverse takeover, or “RTO” in short, is a transaction whereby a private company effectively gains a listing on the stock exchange by means of getting itself acquired by an existing listed company.

This typically involves an existing listed company (“Listco”) (which can either be a Mainboard company or a Catalist company) acquiring the shares of a private company (“Target”) in consideration of issuance to the current owner of the Target (“Vendor”) a large number of new Listco shares, thus enabling the Vendor to take control of the Listco.

Upon completion of the acquisition of the Target, the Listco will own the Target and the Target’s business will become part of the Listco’s group business. With new controlling shareholders in place at the Listco, there will typically be a change to the composition of the Listco’s board of directors. And in most recent cases, the new controlling shareholders would have the Listco dispose of its previous businesses such that post-RTO, the Listco’s sole business would be that of the Target’s. This effectively achieves the objective of the Target gaining a listing through the backdoor, also known as “backdoor listing”.

Reasons to pursue an RTO

An RTO can be an attractive route for a company to gain a listing for the following reasons:

(a) Agreed valuation and pricing upfront

In an RTO, the Listco and the Vendor would agree on the valuation of the Target, as well as the pricing of the consideration shares, at an early stage of the transaction. This would usually be at the point when the definitive sale and purchase agreement is signed. This allows for greater clarity and certainty with regard to the valuation and pricing of the Target at an early stage in the process.

(b) No requirement for underwriting and no need for book-building

In a typical RTO, the new shares being issued are the Listco consideration shares and these are issued only to the Vendor. There would therefore be no need for underwriting. Nor would there be a need for a book-building exercise to ensure sufficient investor interest in the issue. This would imply substantial savings in expenses otherwise associated with underwriting and book-building.

(c) Shareholder support

It is fairly common for the Listco to have an existing majority shareholder or a group of shareholders who collectively control a significant portion of the Listco shares and who would be on the Listco’s board of directors. These key shareholders would usually be supportive of the RTO and would provide the necessary majority shareholders’ approval at a general meeting of Listco shareholders where approval is sought for the RTO.

Recent RTOs in Singapore

One of the largest RTOs in recent memory is the reverse takeover of Ezyhealth Asia Pacific Ltd (“Ezyhealth”) by Wilmar Holdings Pte Ltd in 2006 (the “Wilmar RTO”). The Wilmar RTO transformed Ezyhealth (now known as Wilmar International Limited) from a small-scale healthcare provider into a multi-billion dollar agribusiness company.

Other more recent RTOs in Singapore include:

(a) The reverse takeover of Hisaka Holdings Ltd. (“Hisaka”) by Regal International Holdings Pte. Ltd. (“Regal”) in 2014. Prior to the RTO, Hisaka was a precision manufacturer and upon its completion, the RTO resulted in Regal’s Malaysian property development business being injected into the group business of Hisaka. The listed entity is now known as Regal International Group Ltd and it operates two business divisions – the precision manufacturing business and the property development business.

(b) The reverse takeover of St James Holdings Limited (“St James”) by Perennial Real Estate Holdings Pte Ltd (“Perennial”) in 2014. Prior to the RTO, St James was in the entertainment business and owned a variety of bars and clubs. In this RTO, St James disposed of its entertainment business and Perennial’s property assets were injected into St James. The listed entity is now known as Perennial Real Estate Holdings Limited and is currently in the business of property development and management.

Further, in light of recent trends where companies are exploring privatisation or increasing their share prices to avoid being placed on the “minimum trading price” watchlist of the Singapore stock exchange (the “SGX-ST”), an RTO is a viable alternative option for such companies to retain their listing status on the SGX-ST. Such companies could utilise an RTO as an alternative to delisting by seeking to inject a fresh business into the Listco (which may be helpful to increase the value of the Listco), as well as to enable the existing businesses of the Listco to be privatised and divested.

Regulations and requirements for an RTO

An RTO requires interaction and compliance with the various different legislation and quasi-legislation that make up the regulatory framework here in Singapore, including the following:

(a) The listing rules of the SGX-ST (“SGX Listing Rules”)

The SGX Listing Rules govern the admission and listing of companies on the SGX-ST and prescribe the requirements applicable to an RTO. These pertain to matters such as the approvals required, admission criteria for the incoming Target’s business and the continuing obligations of the Listco (together with the Target, the “Enlarged Listco”) after the RTO. Different sets of SGX Listing Rules will be applicable depending on whether the Listco is listed on the Main Board or the Catalist of the SGX-ST.

(b) Securities and Futures Act (“SFA”)

Part XIII of the SFA and the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations (the “SFR”) provide for the regulation of the offering of shares in Singapore and prescribe detailed disclosure requirements in relation to an offering of shares (typically applied to an initial public offering (“IPO”)). As an RTO is in substance similar to an IPO, the RTO will have similar disclosure requirements as those which are applicable to an IPO under the SFA and the SFR.

(c) Singapore Code of Take-overs and Mergers (the “Take-over Code”)

Under the Take-over Code, amongst other rules, if the Vendor and its concert parties come to hold more than 30% of the shares in the Listco, the Vendor will need to make a mandatory general offer for all the remaining shares in the Listco. In an RTO, the Vendor will usually seek a waiver (“Whitewash Waiver”) from the Securities Industry Council of Singapore (“SIC”) from this obligation to make a mandatory general offer. The SIC may grant the Whitewash Waiver to the Vendor subject to the satisfaction of certain conditions (such as obtaining Listco shareholder approval for the whitewash). A Whitewash Waiver is one of the standard items typically obtained for the Vendor in the context of an RTO.

by Shook Lim & Bok

Advantages of Cross Border Listings

Lower cost of capital, expanded global share holder base, greater liquidity in the trading of shares, prestige and publicity are among other the drivers behind firm’s decision to list their shares abroad. In addition, the afore mentioned benefits surpass possible costs that the firm may experience like listing costs, exposure to legal liabilities, taxes and various trading frictions and reconciliation of financial statements with home and foreign standards.

Financial Gains

Existing regulation in local capital market like taxes, information asymmetry and foreign ownership restrictions usually act as barriers and prevent foreign investors entering those markets. In addition, local investors in segmented domestic capital markets in order to undertake the risk tighten to the local market usually require a risk premium.

In order to counter these problem domestic firms can adopt policies such as listing in a foreign exchange in order to offset the negative effects of market segmentation and offer several other straightforward advantages that stem from lower transaction costs.

Further more, cross border listing serves as a mean for foreign investors to save any transaction costs associated with dealing in a foreign currency as well as to effectively bend any existing foreign exchange regulations since they are allowed to trade share in their own currency. Taken into account that cross-listing serves to lower barriers to foreign investment cross-border listing serves effectively in reducing the firms costs related to market segmentation and therefore lowers the cost of external financing.


The ability to prevent shareholders or managers to acquire private benefits from their firms is an important aspect of corporate governance since it represents an important source of potential conflict with public shareholders.

After all the rationale of raising external capital must be towards that it must be raised only after managements commitment to return this capital to investors and not extracting it for the controlling shareholders personal uses.

Agency conflicts could arise in the case where the set of actions of corporate managers or controlling shareholders are not aligned with the interests of public shareholders.

On the other hand, information problems may arise if the management of the company, although having good information about future cash flows, is unable to credibly convince investors about the accuracy of these cash flows.

Managers can alter those problems if they choose to bond themselves in a better governance regime by cross-listing in order to commit not to engage in illegal activities and as a result they can increase the firms’ value since they are able to raise external capital.

Consequently, cross border listing effectively improves a company’s corporate governance regime and this particularly true for such companies that come from countries with inadequate supervision and disclosure standards.

In addition, firms that decide to list their shares on a more demanding exchange in terms of disclosure and corporate governance standards enjoy a better post listing profitability than those that cross list in other exchanges.

Awareness / Investor Recognition

Through cross listing firms can increase investor awareness and expand its potential investor base on their securities more easily than if it traded on a single market. Cross border listing enhances the credibility of a firm by providing information to the local capital market therefore the continue flow of information allow the capital market to make faster and more accurate decisions.

Further more, listing a company’s shares in a major and prestigious stock exchange like NYSE or LSE is accompanied with increased coverage and local media attention which in turn enhances visibility.


In order for a market to be liquid transactions must be executed rapidly and with little impact on prices. Firms pursue cross border listings since it reduces transaction costs via an improvement in market liquidity following the foreign listing.

The relationship between liquidity and cross listing lies upon the global competition for order flow (trading volume). Consequently, exchanges are forced to continuously look for ways to improve their trading processes in order to enhance market quality and maintain or attract order flow.

The benefits that companies seek to gain through cross border listing come as a reduction in the firm’s bid ask price resulting in an increase in firm’s valuation, therefore this improved liquidity is more likely to attract more institutional investors.

In addition, another factor favouring the enhancement of liquidity, especially for listing firms that come from emerging markets, is the existence of informational links between markets. If informational links for example were poor for listing firms that come from emerging markets cross-listing would actually reduce liquidity and increase volatility on the domestic market as informative trades were directed to other markets.

Capital Rising

Another benefit that cross border listing provides to foreign companies is the improved terms by which they can raise external capital either because credit constraints are relaxed, or because of the existence of the bonding effect due to which investor protection is increased.

The benefits of cross listing are further increased in the case that either the firm or its shareholders due to financial constraints present in the home market serve as barriers to capital raising.


ACE Market – Bursa Malaysia

What is the ACE Market?

The ACE Market which stands for ‘Access, Certainty, Efficiency’ is actually the new name for the formerly known MESDAQ (Malaysian Exchange of Securities Dealing and Automated Quotation) market. MESDAQ came into existence in 1997 when it was the home of mainly technological stocks and today it is replaced by the ACE Market under Bursa Malaysia. The ACE Market was derived together with the unification of the Main and Second Board into the Main Market of Bursa Malaysia in 2009.

The ACE Market is seen as the ideal market for start-ups and new companies which are run by entrepreneurs who are looking to push for more capital by listing their companies public. This is where they might not have the large and high amount like companies in the Main Market but would probably have a strong product or service portfolio which if given more capital, would surely succeed.

The ACE Market is very much like the GEM (Growth Enterprise Market) in Hong Kong or Catalist of Singapore and companies in ACE Market are sponsor-drive and it is not only limited to the technological sector when it was called MESDAQ.

This means that companies from any sector or size can apply to be listed in the ACE Market where it is designed to offer a more efficient and certain way for you to do so. Typically, the regulations for listing in ACE market are less stringent and the company need not provide the track records like how it is required in the Main Market.

The regulatory framework of the ACE Market is to offer companies and entrepreneurs with better transparency and hence makes it easier to list. Such is the objective of this market where the whole idea is to encourage more innovative products and companies to push for development and growth. Entrepreneurs would be encouraged to offer better products and services where there is now an option o try and inject more capital into their company for the development of their offerings. This in return will provide investors with the opportunity to start investing in SMEs (small and medium enterprises) which might not be technology based.

ACE Market: Listing Factors for Consideration

In reviewing a listing application for the ACE Market, Bursa Malaysia essentially relies on the Sponsor to assess the suitability of the listing applicant. Additionally, Bursa Malaysia will also assess your listing proposal to ascertain if it is against public interest. The following attributes would allow a Sponsor to decide that a company is well-suited to list on the ACE Market.

Growth Prospects
A company in which its core business and its industry are expected to have a visible growth trajectory within the foreseeable future.

Capable Directors and Management
A company with a leadership team of good standing and who has demonstrated the capability and ability to grow the business.

Commitment to Compliance
A company with sufficient systems, procedures, policies, controls and resources in place to ensure continuous compliance with the relevant rules and regulations.

Responsible Directors
A company in which its directors are fully aware of and understand their fiduciary obligations.

Risk Management
A company whose internal control and risk management systems are in place in view of the company’s business and growth plans.

Good Corporate Governance
A company whose founders, promoters, directors and management team have a good track record in corporate governance and are not in a conflict of interest situation with the company.

Similar to the Main Market, relevant and adequate disclosures will be made in your Prospectus articulating the prospects of your company and your investment proposition. Companies listed on the ACE Market may subsequently apply for a transfer to the Main Market provided they meet the profit track record required for the Main Market.


Some key considerations to take into account prior to listing:

How does the listing meet the goals and objectives of your stakeholders?

While there is a general sense of acceptance on the benefits of listing, expectations of these benefits would likely vary between the shareholders, the directors, the management and the employees of a company. As such, it is important to ensure that the goals and objectives of your internal stakeholders are aligned. Open and transparent communication of the value proposition for each stakeholder segment is key. Indeed, company-wide support and buy-in for a listing exercise will go a long way in facilitating a smooth listing process.

Are you and your management team prepared to invest the time and effort that goes into a listing?

The road to a successful listing can be challenging. The effort and time to be invested in a listing exercise can never be over-estimated. It is not just about carrying out the necessary paper work required in the process. It is also about dealing with unexpected issues along the way that may take up management time.

While your advisers will try to prepare you as best as they can for the road ahead, every listing candidate is unique. There may be difficulties and setbacks along the way. That is why it is important to ensure that there is committed support from all relevant parties right from the beginning.

Also, the investment in time and effort does not end with a successful listing. Making the necessary disclosures to the public, be it announcing financial results or a significant corporate development, is an important element of being a listed company. Hence, it is crucial that the directors and key management of your company are prepared to invest the necessary time and resources in ensuring that all the disclosures are timely, relevant and accurate.

Are you prepared to bear the cost involved in the listing process and ongoing cost of maintaining the listing?

Being listed on a stock exchange is a major investment for any business. The cost involved in a listing exercise can be significant. There are fees payable to the SC and Bursa Malaysia for the listing, including the processing of the IPO application and the issuance of the Prospectus.

Fees are also incurred from the engagement of various professional advisers/parties including:
• Principal Adviser
• Sponsor (for listing on the ACE Market)
• Lawyers
• Reporting Accountants
• Underwriters, if required
• Placement Agent/Book-Runner
• Public Relations (PR) Firm
• Issuing House
• Valuers, if required
• Independent Market Researchers, if required
• Tax Advisers, if required

The fees charged by these professionals will vary depending on the prevailing market condition, the complexity of the listing exercise and the size of the IPO. You may be able to fix some of your cost at the start of the process such as the professional fees which will help you get a clearer idea of your expenses in advance. Apart from the initial outlay, the listing cost can be paid out from the proceeds of your listing.

It is also important to note that for the listing on the ACE Market, your company must secure and maintain the services of a Sponsor for at least three full financial years after your admission into the ACE Market. This is a listing cost that you should account for.

After a successful listing, there are also costs associated with meeting the continuing obligations of a listed company. These include cost of raising additional capital, cost of an ongoing investor relations programme and annual fees payable to the Exchange for maintaining the market for your shares. As such, prior to making a decision to list, the cost of listing and maintaining that listing must be weighed against the immediate to long term benefits your company will receive as a listed

Are you prepared to come under constant scrutiny with ongoing disclosure and reporting requirements?

The greater accountability to outside shareholders inevitably means you lose much of the privacy and autonomy you may have enjoyed when managing a private business.

As a listed entity, there are rules and regulations your company is obliged to comply with primarily on the obligation to periodically disclose the company’s affairs and financial performance to the public.

In addition, information such as directors’ remuneration policy and procedures need to be made public. Due to your heightened profile, you can expect greater media coverage which is beneficial in good times but may have a negative impact in times of underperformance or crisis.

Are you prepared for a dilution in the control of your company with a listing exercise?

Depending on your shareholding structure upon listing, control by the original shareholders of your company will be
diluted subsequent to listing. This is because new shares will be issued and the original shareholders may have to sell their shares to meet the public shareholding requirements.

Once listed, at least 25% of the shares must be in public hands. This inevitably involves a certain degree of dilution in control to outside shareholders whose views must be taken into account. In fact, certain corporate transactions such as significant acquisitions are only possible with the prior approval of shareholders.

Even if you are a controlling shareholder, you will not be able to control who buys and sells the shares. In this sense, depending on the proportion of shares which remains in the directors’ hands, a listed company can be subjected to take-over bids in the future.

Are you prepared to engage in continuous communication with the investors?

Investor Relations (IR) is an important component of any listed company. After all, as a listed company, your company’s overall performance will be tracked against the performance of its share price, no longer just on its financial performance. This means that you have to be mindful of the fact that share price can be impacted by, amongst others, the company’s fundamentals and strength, prevailing market conditions and perceived outlook.

US OTC (Over-The-Counter) Market

What is an ‘Over-The-Counter Market’ 什么是OTC市场?

A decentralized market, without a central physical location, where market participants trade with one another through various communication modes such as the telephone, email and proprietary electronic trading systems. An over-the-counter (OTC) market and an exchange market are the two basic ways of organizing financial markets. In an OTC market, dealers act as market makers by quoting prices at which they will buy and sell a security or currency.

The way OTC is structured allows companies the ability to “move up” in the marketplace as they provide better transparency. That market includes:

OTCQX Best Marketplace: for established, global and growth companies (range from blue-chip companies like Roche, Volkswagen and Adidas to growing US and international companies)

OTCQB Venture Marketplace: for entrepreneurial and development stage companies (since last May, companies must be current in their reporting to the SEC, to date there are over 780 verified companies traded).

OTC Pink Open Marketplace: offers trading in a wide variety of securities from SEC reporting companies that are delinquent in their disclosure to foreign companies that limit distribution of disclosure to their home market to financially distressed and dark companies.

Financial portals and online brokerages that display the OTCQX, OTCQB and Pink market designations:



The OTCQB Venture Market offers early stage and developing companies the benefits of being publicly traded in the U.S. with lower cost and complexity than a U.S. exchange listing. Streamlined market standards enable SMEs not yet ready for the OTCQX Best Market to provide a strong baseline of transparency to inform and engage U.S. investors.

To be eligible, companies must be current in their SEDAR or SEC reporting and undergo an annual verification and management certification process. Companies must meet $0.01 bid test and may not be in bankruptcy.

As a verified market with efficient access to U.S. investors, OTCQB helps companies build shareholder value with a goal of enhancing liquidity and achieving fair valuation. As a result, more companies are traded on OTC Markets than on NYSE, NYSE MKT and NASDAQ combined.


Efficient Market Standards: Companies may leverage their SEDAR disclosure (SEC Exchange Act Rule 12g3-2(b)). There are no Sarbanes-Oxley and SEC Reporting requirements to trade on OTCQB, bypassing burdensome, costly and duplicative NYSE and NASDAQ listing requirements.

Transparency: OTCQB is an SEC recognized and a verified market with current company information and financial standards that enable brokers to more easily quote and trade a security.

Visibility: Companies engage a far greater network of U.S. investor, data distributors and media partners, ensuring U.S. investors have access to the same high-quality information that is available to investors in Canada, but through U.S. platforms and portals used to conduct research.

Nasdaq, where the ideas of tomorrow find capital today!


We invented electronic trading in 1971 and are proud that the revolutionary model that we developed 40 years ago is now the standard for markets worldwide. With our unsurpassed technology, an emphasis on transparency, and advanced tool set, we offer a unique and compelling value that attracts new firms to our markets. We then provide quality customer service, exceptional visibility opportunities and ground-breaking market intelligence resources. In short, we bring our entire business ecosystem to bear for our listed companies. With this unique value proposition, Nasdaq is the listing venue of choice for the world’s most exciting companies.

Nasdaq Market Tiers

The Nasdaq Stock Market has three distinctive tiers: The Nasdaq Global Select Market®, The Nasdaq Global Market® and The Nasdaq Capital Market®. Applicants must satisfy certain financial, liquidity and corporate governance requirements to be approved for listing on any of these market tiers.

The initial financial and liquidity requirements for the Nasdaq Global Select Market are more stringent than those for the Nasdaq Global Market and likewise, the initial listing requirements for the Nasdaq Global Market are more stringent than those for the Nasdaq Capital Market. Corporate governance requirements are the same across all Nasdaq market tiers.

It is important to note that even though a company’s securities meet all enumerated criteria for initial inclusion, Nasdaq may deny initial listing, or apply additional conditions, if necessary to protect investors and the public interest.


Partnership –– Our View of Listings

Nasdaq is a trusted market leader and has built a financial community of world-renowned industry innovators and visionaries – Apple, Facebook, Amazon, Amgen, Virtu, Starbucks, eBay and Alphabet. This community of companies also includes $815 billion in market value transfers since 2005.

IPO EXPERIENCE – The 21st Century Stock Exchange

Taking a company public is a significant undertaking and a major milestone. Nasdaq works to ensure that our listed companies have a seamless first trade and accomplish their listing day visibility objectives. We use all the resources at our disposal, including our location in New York’s Times Square — MarketSite — to create a unique event.

Overview of Initial Listing Requirements

The following charts provide an overview of the criteria companies must satisfy. For a more detailed presentation of our listing requirements, please refer to our Listing Rules and consult our comprehensive list of frequently asked questions.

Listing Timeline

While it generally takes four to six weeks to process a listing application, this time frame is variable and may be shortened considerably, if the application raises no issues and the company responds quickly to Staff comments.

Week 1. Company submits application for listing and Nasdaq Listing Qualifications Staff begins its review.

Weeks 2-3. Staff completes its preliminary review and prepares comment letter.

Weeks 3-4. Company addresses any issues raised by Staff.

Weeks 5-6. Staff completes their review and company is approved for listing.


OTC市场(over the counter)既场外市场。以权益类证券为例,OTC市场有两个主要的报价媒介,OTCBB(OTC Bulletin Board) 和 OTC Link(也是我们比较熟悉的 OTC Market)。

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NASDAQ 对非美国公司提供可选择的上市标准

选择权一:财务状况方面要求有形净资产不少于400万美元;最近一年(或最近三年中的两年)税前盈利不少于70万美元,税后利润不少于40万美元, Read More

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