What Is15c211? about 15c211. filing a 15c211.



Posted: Thursday, April 06, 2006

by Brian Bredenkamp
global solutions consulting







The basic idea behind designing Rule 15c211 was to provide fully reporting public companies an easy way to have their securities quoted on the National Association of Securities Dealers' Over-the-Counter Bulletin Board (NASD OTC/BB). A company intending to obtain a quotation for its securities has only to file in some simple disclosures through form 15c211, commonly known as form 211, with NASD, and once approved, it will be able to trade its stock on the OTC/BB.



Nowadays, going public has become an appealing proposition for most entrepreneurs due the advantages, as attracting more potential investors and more capital, it offers. There are basically two ways for a private company to become a public company, first, is the Initial Public Offering (IPO) method, and second is the reverse merger method. Due to benefits as higher valuation, easier capital formation, inexpensive acquisitions, and lesser costs and risks, most capitalists prefer reverse merger method for going public.



In the reverse merger method, the shareholders of a private company sell all their shares in the private company to a public company. The public company, then issues a large number of shares, which are acquired by the former shareholders of the private company. The public company is finally merged with the private company. In this way, the private company ends up controlling the public company.



As soon as the reverse merger process is completed, two tasks are performed:

  1. The private company gives its name to the newly formed public company.
  2. An information statement called 8-K, which includes the information about the newly formed company, its new officers and directors and its stocks, and a full description of its business and financial statements audited to US GAAP standards, is filed within 4 days of the merger.


The basic reason behind reverse merger was to be able to trade publicly, and for this to happen, the newly formed public company must register with the Securities and Exchange Commission (SEC). The company can use SB-1, SB-2, or Form 10 for registration. After about three to four months, SEC will declare the registration statement effective and thereafter, the new public company will become a reporting company.



The newly formed public company, which is also a reporting company, must also have a symbol. To obtain the symbol, the company would have make an application to the NASD, which requires filling of Form 15c211. Only a market maker who is the member of the NASD can fill Form 15c211.



Although there are no stringent financial requirements to be listed on the OTC/BB, but NASD ensures that the company’s affairs are in order, and there are at least 40 to 50 shareholders and sufficient float before approving Form 15c211. The entire process takes about three to six months. Once, NASD approves Form 15c211, the company can have its securities quoted on the NASD OTC/BB.





Nia Stefany

Managing partner



http://xnergy.biz

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