Re-Listing from Pink Sheets to OTCBB
Issuers whose securities are de-listed from the OTCBB because of failure to comply with Rule 6530, usually because they fall behind in their reporting obligations under the Securities Exchange Act of 1934, have two options when attempting to get re-listed once they are again compliant.
If, subsequent to the de-listing, the issuer filed a Current Report on Form 8-K for an event covered by Items 1, 2, 3, 4, or 6 of Form 8-K (a so-called “Disqualifying Filing”), then the issuer will have to contact a market maker who will have to file a full Form 211 with the NASD. Along with the Form 211, the market maker will have to submit copies of recent SEC filings, and there is likely to be at least one round of comments. The issuer should expect this process to take between 3 and 6 weeks, unless of course there are unresolved comments.
If, however, subsequent to the de-listing, the issuer did not file a Disqualifying Filing, then the issuer is probably eligible for an exemption from Form 211. In this event, any market maker who has quoted the stock on the Pink Sheets during the 30 previous days can submit a 15c2-11 Exemption Request Form. This form is 2 pages long, does not require any exhibits or attachments, and the NASD has told us they have an internal policy of responding to the request in 3 business days. Thus, it is possible to be re-listed on the OTCBB in as little as 4 business days.
Our advice to issuers who have fallen behind in their reporting obligations, and who are about to have (or recently have had) an “E” appended to their trading symbol, is to review the list of active market makers in your stock and make sure that you have some kind of relationship with at least one of them. If not, then in addition to getting your SEC filings current, you should undertake to either develop a relationship with one of the existing market makers, or convince a “friendly” market maker to begin making a market in your stock so that they can submit the Exemption Request Form when you are again compliant.
Brian A. Lebrecht is an attorney with and the founder of The Lebrecht Group, APLC, located in Irvine, California and Salt Lake City, Utah. He can be reached at (801) 983-4948 orblebrecht@thelebrechtgroup.com with questions or comments.
Please visit our website at www.thelebrechtgroup.com for further information.
