FINRA Regulatory Notice 17-41: Response to FINRA’s Request for Comment on the Effectiveness and Efficiency of Its Payments for Market Making Rule
OTC Market Group recently submitted a comment letter to the Financial Industry Regulatory Authority, Inc. (FINRA) in response to the request for comments on the Effectiveness and Efficiency of its Payments for Market Making Rule 5250.
In the letter, we recommend amendments to Rule 5250 that would allow issuers to compensate broker-dealers for the reasonable out-of-pocket expenses involved in preparing and submitting a Form 211. Finding a broker-dealer to file a Form 211 presents a daunting initial hurdle for companies looking to access the public markets in an efficient and orderly manner. From the broker-dealer perspective, filing a Form 211 involves collecting, reviewing and analyzing the issuer’s disclosures, as well as responding to FINRA’s comments and questions. The process presents a significant cost and time commitment, with no possibility of remuneration.
Rather than banning payments all together, FINRA can more effectively facilitate small company access to public m...more
Short-Term Gain = Long-Term Pain?: Building a Sustainable Public Company with Longer-Term Investors
Much attention has focused on recent Reg A deals (Arcimoto, Shiftpixy, Chicken Soup for the Soul Entertainment, Myomo and Adomani) that have listed on national exchanges (Nasdaq and NYSE). But the question remains, is this the right move for small-caps seeking to become public companies through innovative capital raising frameworks? After the excitement of ringing a bell has worn off, the visibility has dissipated, the bankers have been paid and the festivities come to a close, a bigger challenge begins for management to grow the value of their business while balancing the resource-intensive requirements of maintaining a listing on a national exchange.
Reg A was designed for small companies, start-ups, entrepreneurial innovators and those seeking to alleviate the cost, time and complexity associated with the traditional IPO process. Part of the larger JOBS Act story, this legislation increased opportunities for transparent and online capital raising whereby small cap ...more
CfPA launches Knowledge-Sharing platform with Brainsy.com
