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OTC Capital is currently Singapore’s only market making online equity trading platform for shares of unlisted Singapore
incorporated public companies. OTC Capital helps companies with a viable business and good growth prospects to raise up
to SGD5m ( in aggregate) within any 12-month period in a relatively cost-effective manner; and allows the trading of
UNLISTED securities amongst OTC Capital investors who are registered with Phillip Securities.
Benefits of being an OTC quoted company
By being quoted on OTC Capital, companies benefit from being exposed to a growing pool of over 3,000 registered investors.
On top of that, for investors with access to Bloomberg Terminal and Reuters, they are able to access prices of OTC Capital
quoted companies. With the assistance of the market-maker, companies quoted on OTC Capital can have their shares traded on
the POEMS internet trading platform provided by Phillip Securities.
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Minimum admission requirements
Whilst companies need not be profitable or have a minimum shareholders’ spread, they need to show that they have
a viable business and good growth prospects. The directors of the company must be of sound integrity and character,
and have adequate experience and qualifications. Currently, OTC Capital admits only Singapore incorporated companies.
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OTC Rules
Companies applying for admission to OTC Capital and those which are currently on OTC Capital are required to follow
the admission process and disclosure requirements set out in the OTC Rules.
Click here to download the OTC Rules.
OTC Quotation Process
The process begins with an initial meeting with the company seeking to quote on OTC Capital (“OTC Prospect”) with OTC Management.
Upon initial assessment of its suitability, the OTC prospect then meets with the Corporate Advisor and they then sign an agreement
on the terms of engagement, including the fees payable. Suitability for coming on board OTC Capital will include a reasonable
valuation and ability of the promoters to gather sufficient investors. Thereafter, a mandate is signed between the OTC prospect
and the Corporate Advisor.
The legal due diligence and preparation of the Small Offers Document will take place. Upon completion of the Small
Offers Document, an application for Admission to OTC Capital is then prepared and submitted together with the Small
Offers Document to the OTC Committee who will deliberate on its admissibility. They will either approve, decline or
revert to the Corporate Advisor if there is a need for further clarification.
Upon approval by the OTC Committee, road shows will be organized investors who are registered with OTC Capital
to learn about the OTC prospect and decide if they wish to invest in them. At the same time, the promoter of the
OTC Company will commence his fund-raising from his supporters.
Once the funds are raised, “scripless” shares being issued, then the market-maker will commence quoting
the buy/sell price of these shares and trading begins thereafter.
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Costs to be incurred for admission to OTC
The main costs elements are :
- Corporate Advisor’s Fees
- Lawyer’s fees for legal due diligence
- OTC Fees for Application, Admission and Quotation and
- Placement Fees which is a percentage of the amount raised by the placement agent.
- Fees for additional director as appointed by Phillip Capital if there is investment by both Phillip Capital and Spring Seeds Capital Pte Ltd *
(*Spring Seeds requires the co-investor to appoint a director to the company)
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