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Issuer Regulation

Requirements for Issuers Quoted in U.S. Over-the-Counter Markets

Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets (MI 51-105 or the rule):

  • makes certain companies “reporting issuers” under the Securities Act if their securities are quoted or have received ticker symbols for quotation on the U.S. OTC Markets,
  • describes what those OTC reporting issuers must disclose, and
  • limits how and when investors who acquire an OTC reporting issuer’s securities in a private placement may re-sell them or use exemptions in the Act.

The BC Securities Commission has also imposed conditions of registration for investment dealers who trade in U.S. over-the-counter markets. See our webpage on Conditions of Registration and Rule for U.S. Over-the-Counter markets for details.

  • OTC Reporting Issuers Checklist
  • How does a company become an OTC reporting issuer in BC?
  • Guidance
  • Disclosure Obligations
  • Forms
  • About SEDAR+
  • Disclosure Obligations of Insiders
  • Exemptions for SEC Filers and Their Insiders
  • Mining Issuers
  • Ceasing to be an OTC Reporting Issuer and Cease Trade Orders

OTC Reporting Issuers Checklist

Click here for a checklist of what questions to ask if your company may be an OTC reporting issuer.

How does a company become an OTC reporting issuer in BC?

MI 51-105 applies to companies that:

  1. have issued securities that have been assigned a ticker symbol by the Financial Industry Regulatory Authority for use on any of the over-the-counter markets in the United States
  2. do not have securities listed or quoted on any of the North American exchanges or quotations system listed in section one of the rule,
  3. have one or more of the significant connections to British Columbia described in section three of the rule, and
  4. have not been exempted from the rule by BC Instrument 51-512 Certain Private Placements.

The North American exchanges or quotation systems listed in section one of the rule are:

  • TSX-Venture Exchange Inc.,
  • TSX Inc.,
  • Canadian National Stock Exchange,
  • Alpha Exchange Inc.,
  • New York Stock Exchange LLC.,
  • NYSE Amex LLC.,
  • NASDAQ Stock Market LLC, or
  • Aequitas NEO Exchange Inc.

The significant connections to British Columbia described in section three of the rule are:

  1. the company’s business has been directed or administered in or from the province,
  2. promotional activities for the company have been carried on in or from the province, or
  3. on or before the ticker symbol date, the company distributed a security to a person resident in the province (seed shares), and that security is of the class of securities that became the issuer’s OTC-quoted securities.

An OTC quoted company that is not designated as an OTC reporting issuer under MI 51-105 can become a reporting issuer by filing a non-offering prospectus with the BCSC or by applying to the BCSC for an order to designate them a reporting issuer in BC. If the company is already a reporting issuer in another Canadian jurisdiction, it can file a notice to become a public issuer in BC. See BCP 12-601 and the definition of "reporting issuer" in section 1 of the Securities Act.

Guidance

MI 51-105’s Companion Policy, 51-105CP, explains how the BCSC interprets and applies the rule.

Here are links to policies that provide guidance to reporting issuers about disclosure obligations generally:

Most instruments that impose disclosure obligations have companion policies that also provide guidance.

Disclosure Obligations

Some of the key disclosure rules that apply to OTC reporting issuers:

View the continuous disclosure filing calendar, which shows due dates for annual and interim filing requirements.

Forms

Forms called for in the rule:

About SEDAR+

SEDAR+ is a secure web-based system for market participants to file, disclose, and search for issuer information in Canada’s capital markets.

OTC reporting issuers must use SEDAR+ file continuous disclosure documents and certain forms with the Canadian securities regulatory authorities, including the BCSC. You can read more on our page about SEDAR+.

Disclosure Obligations of Insiders

Insiders of an OTC reporting issuer have the same obligations as insiders of other reporting issuers.

You can learn more about the System for Electronic Disclosure by Insiders (SEDI) and find other information about insider reporting and other responsibilities on our Insiders page.

Exemptions for SEC Filers and Their Insiders

An OTC reporting issuer that:

  • has a class of securities registered under section 12 of the U.S. Securities Exchange Act of 1934 or
  • is required to file reports under section 15(d) of that act

may have exemptions from most continuous disclosure requirements. Insiders of these issuers may also have exemptions from insider reporting requirements.

An OTC reporting issuer must comply with the same timely disclosure requirements for material change reporting as other reporting issuers. The requirements are to issue a news release and file the news release and a material change report on SEDAR+. An OTC reporting issuer that files Form 8-K Current Report with the SEC disclosing the material change may file Form 8-K Current Report on SEDAR+ as its material change report.

An insider of an OTC reporting issuer that is incorporated outside of Canada and is an SEC filer is exempted from insider reporting requirements if the insider files insider reports with the SEC under U.S. federal securities law. However, an insider of an OTC reporting issuer that is exempted from filing insider reports under U.S. federal securities law must file insider reports in Canada.

The most common exemptions from continuous disclosure requirements for SEC filers and their insiders are in:

Please refer to Companion Policy 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets for further guidance.

Mining Issuers

If you are a mining issuer, you may wish to refer to additional documents in our Mining section.

Ceasing to be an OTC Reporting Issuer and Cease Trade Orders

If you are an OTC reporting issuer that would like to be cease to be reporting in BC, or that is subject to a cease trade order from the BCSC that you would like revoke, please reach out to the BCSC Contact Centre: