ASX-listed companies seeking to reach US investors often consider secondary listings, which can be costly and demand adherence to different disclosure standards. A more efficient and cost-effective alternative is cross-trading via the over-the-counter (OTC) market. Jason Paltrowitz, executive vice president, corporate services at OTC Markets Group, joins Proactive’s Jonathan Jackson to discuss. The cross trading method, utilised by companies like CSL, enhances investor engagement, access to capital, and attracts US funds and retail investors who prefer securities trading domestically in US dollars. CSL, a leading Australian biotech, is among 61 Australian companies (total market cap of $154 billion) trading on the OTCQX and OTCQB markets, operated by OTC Markets Group. These markets are the largest US stock markets for non-US equities, facilitating regulated trading for more than 12,000 US and international securities. Since joining OTCQX last April, CSL experienced a 45% increase in ADR total trading volumes compared to the previous year and a 3% increase in global trading volumes. CSL ranks among the top five most active OTCQX securities of 2023, surpassing companies like Heineken and adidas. Additionally, CSL’s average daily trading volumes rose by 42% when comparing the year before and after joining OTCQX. A study of companies cross-trading on OTCQX showed a 26% increase in home market trading volume by the number of shares. In the past year, 15 Australian companies joined OTCQX and OTCQB, mainly from the mining and resources industry, reflecting strong demand for gold stocks. OTC Markets hosts 925 Australian securities and more than 821 companies with a gross market cap of $1.50 trillion, including Fortescue Metals Group and Pointsbet.
How Australian companies are increasing US investor engagement via OTC Markets
