OTCBB COMPANIES

OTCBB companies are required to file updated financial reports with the SEC, a banking regulator, or an insurance regulator. If they fail to file with the SEC timely they will face consequences and possibly be removed from the OTCBB. There are a few exceptions with companies filing with the SEC and the reports must be honest.

OTCBB companies can be removed from the OTCBB if they fail to file financial reports with the SEC on time. The NASD regulates OTCBB companies and they will add a fifth letter “E” to its four letter stock symbol. This letter “E” shows investors that they have a 30-day period in which to file their documentation with the SEC. If they use a banking regulator or an insurance regulator, they have 60 days. If the company has not met the deadline of the 30 or 60 days, then they are removed from as one of the OTCBB companies.

OTCBB companies that do file reports have to use the electronic EDGAR database. Reports that are filed through the SEC must be truthful, honest, and completed properly. The reports must be truthful because investors rely on the information to invest in the company. Often times companies lie about their financial withstanding making themselves look more successful than they really are. This causes people to buy tons of stock and invest in their company. The SEC will bring enforcement against any company lying on their books to bring in more investors. The SEC will remove all OTCBB companies that lie about their financials to get ahead in the stock market.

There are only a few exceptions for companies to file reports with the SEC. This includes companies that have less than $10 million in assets. Also a company that raises less than $5 million in revenue annually may be exempt also.

OTCBB companies must file financial reports through the SEC every year if they want to remain publicly traded. If they fail to do so, they may be removed from the OTCBB. In addition to filing, the reports must be filed on time and contain only accurate and honest information.