NEW YORK, June 14, 2013 /PRNewswire/ -- R. Cromwell Coulson, President and CEO of OTC Markets Group Inc. (OTCQX: OTCM), testified in a hearing before the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises on June 12 on "Reducing Barriers to Capital Formation." In follow-up to the Jumpstart Our Business Startups (JOBS) Act, the hearing was called to examine expert suggestions for improving capital availability for small companies.
In his testimony, Coulson discussed the value of public trading to small, growing companies and the U.S. economy and the importance of transparency of trading and company information for creating more informed and efficient marketplaces. He also shared OTC Markets Group's proposals for increasing access to capital and share liquidity for small companies:
- Demand that the SEC complete rulemaking on Title II, Title III and Title IV of the Jobs Act in a timely manner, without overly complicated or costly barriers to companies raising capital under these new regulations.
- Update Securities Act Section 17(b) to require increased disclosure of stock promotion activity and greater transparency into the people behind it.
- Improve the share issuance process through better regulation of transfer agents and more thoughtful information exchange between transfer agents, broker-dealers and the Depository Trust Company (DTC).
- Require that insiders and affiliates that buy or sell non-SEC reporting companies publicly disclose transaction information in a manner similar to SEC Forms 3, 4 and 5.
- Bring more transparency to holders of non-exchange traded securities by expanding Section 13(f) of the Exchange Act to require that institutional investment managers disclose their holdings of all publicly-traded equity securities.
- Implement a quote and order price increment (tick size) pilot for all publicly-traded small companies. The pilot should include increased minimum displayed size requirements for broker-dealer proprietary quotes and orders.
- Reject any attempt to create a "trade-at rule" that would require orders be routed to the best publicly-displayed price. Such a rule would effectively reduce choice and innovation, decrease competition between market centers and impose increased and unnecessary costs on investors.
- Support diverse choice and healthy competition among trading venues, and reject any regulation or policy that would lead to giving a "centralized trading monopoly" to the listed stock exchanges or any other trading venue.
- Make margin-eligible all non-penny stocks that are actively traded on "established public markets" and make the SEC responsible for determining the margin eligibility of all equity securities.
- Make all non-penny stocks that are actively traded on "established public markets" exempt from state Blue Sky secondary trading restrictions.
- Update the SEC definition of penny stocks to take into account interim capital raises.
- Allow companies to transparently pay market makers in order to initiate quotations in securities, provide tighter spreads and make more liquid markets.
- Allow smaller SEC reporting companies to opt out of XBRL filings until the cost is vastly reduced.
- Remove antiquated Section 17B of the Exchange Act.
- Institute a 25% corporate tax rate and deductibility of dividends for publicly-traded smaller companies.
As Coulson stated in his written testimony, "Our public markets must be as open, transparent and connected as possible to deliver the value of being a public company to the largest number of companies and their investors."
About OTC Markets Group Inc.
OTC Markets Group Inc. (OTCQX: OTCM) operates Open, Transparent and Connected financial marketplaces for 10,000 U.S. and global securities. Through our OTC Link® ATS, we directly link a diverse network of broker-dealers that provide liquidity and execution services for a wide spectrum of securities. We organize these securities into marketplaces to better inform investors of opportunities and risks – OTCQX®, The Best Marketplace with Qualified Companies; OTCQB®, The Venture Stage Marketplace with U.S. Reporting Companies; and OTC Pink®, The Open Marketplace with Variable Reporting Companies. Our data-driven platform enables investors to easily trade through the broker of their choice at the best possible price and empowers a broad range of companies to improve the quality and availability of information for their investors. To learn more about how we create better informed and more efficient financial marketplaces, visit www.otcmarkets.com.
OTC Link ATS is operated by OTC Link LLC, member FINRA/SIPC and SEC regulated ATS.
SOURCE OTC Markets Group Inc.