Market Makers Play A Significant Role In Reverse Mergers

Market Makers Play a​ Significant Role in​ Reverse Mergers....
One overlooked individual in​ the​ process of​ taking a​ company public through reverse merger is​ the​ market maker .​
The market marker is​ critical especially if​ the​ company is​ going to​ be listed on​ OTC Bulletin Board or​ the​ NQB .​
Pink sheets.
Once the​ private company has decided to​ go public and​ has engage a​ consultant to​ advise management on​ the​ best way to​ proceed .​
And a​ determination has been made to​ do a​ reverse merger.
The first step is​ to​ identify an​ available corporate shell to​ purchase and​ perform the​ due diligence on​ the​ shell .​
The company decides to​ purchase the​ shell and​ proceeds with the​ reverse merger .​
The required Securities and​ Exchange Commission filing must be done.
The Securities and​ Exchange Commission upon reviewing the​ document and​ finding the​ document to​ be in​ order will approve the​ company’s filing.
Now the​ consultant will recommend a​ market maker to​ sponsor the​ company with NASDAQ’s Small Cap Market, OTC Bulletin Board or​ NQB Pink sheets .​
This is​ accomplished by filing form 15c211.
The broker dealer may not publish a​ quotation for​ any securities unless certain information concerning the​ issuer is​ available and​ the​ broker or​ dealer has a​ reasonable basis for​ believing that the​ information is​ accurate.
Some of​ those of​ those Securities and​ Exchange commission requirement are satisfied if:
1 Securities Act registration statement F-6, F-1 has been filed within 90 days.
2 the​ issuer is​ complying with the​ filing requirements and​ the​ broker dealer has in​ its records the​ issuer’s most recent annual report.
3 the​ issuer is​ complying with rule 12g3-2b
4 the​ broker dealer has on​ record information relating to​ the​ issuer, its securities, its business, products and​ facilities, management and​ financial statements and​ certain other require information.
The broker dealer is​ not compensated by company for​ this service causing the​ broker to​ absorb the​ cost involved in​ time spent and​ the​ regular monthly charges by the​ OTC .​
Bulletin Board for​ being a​ market maker in​ the​ company’s stock.
The broker must stay on​ top of​ the​ filing and​ answer all questions pertinent to​ filing as​ requested by the​ OTC Bulletin Board .​
After approval the​ market maker must again file a​ request to​ publish a​ price for​ the​ securities of​ the​ issuer.
For a​ short period of​ time the​ broker dealer will be the​ sole market maker, being willing to​ buy and​ sell the​ stock for​ his own inventory, and​ assuming all the​ risk by himself but he also will be involved all the​ transactions that take place and​ stands to​ make all the​ profits as​ well.
After a​ period of​ time usually 30 days other market makers will be able to​ piggy back on​ the​ broker dealer who did the​ original filing and​ be able to​ publish a​ quotation .​
This provide more liquidity since a​ single market maker will not be responsible for​ all transactions.
Market Makers in​ Bulletin Board stocks must honor their bid and​ ask bid the​ price they are willing to​ pay for​ stock, ask the​ price they are willing to​ sell stock price .​
Below is​ a​ limited chart of​ the​ price and​ size mandated by the​
Price Minimum quote size
0-.50 5,000
0.51-1.00 2,500
1.01-10.00 500
10.01-100.00 200
The market maker role in​ assisting companies to​ go public is​ significant, he is​ the​ one who will be taking the​ risk and​ will reap the​ rewards depending on​ how well the​ securities trade.
Please visit our website for​ additional information in​ going public .​

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