• Carsted Rosenberg

What are F Shares?

Updated: Jul 15

Nordic companies seeking a quotation of their Nordic shares on OTCQX or OTCQB markets by OTC Markets will come across the term "F shares". Here is what this means.

Many international companies' shares trade on the over-the-counter market in the United States. These companies are listed on a foreign exchange in a local currency such as Danish kroner or euro and are cross-traded in the United States in US dollars.


What is an F share?

While some US investors can trade directly in a foreign company’s local market, many US investors prefer to see quotes in US dollars during their regular trading hours. To facilitate trading and reporting, US broker-dealers create trading symbols of foreign securities in the US. These trading symbols are commonly called tickers. The tickers are five letter long acronyms and end with the letter “F”. For that reason, they are traditionally called "F shares". For e.g. adidas AG, the ticker symbol is ADDDF and for Ocean Yield ASA it is OYIEF.


Why does my company have an F share?

The creation of an F share indicates that U.S. broker-dealers and investors are interested in trading your company’s shares. An F share is created in the US when a broker-dealer files with FINRA (the Financial Industry Regulatory Authority) to create a US ticker symbol in order to report trades in the US in your company’s shares. As with American Depositary Receipts, this may happen without your involvement or approval. This is referred to as an "unsponsored" quotation. It means that your shares can be traded "off exchange" between interested parties in the US. While your company may not have been involved in this process, the creation of an F share indicates that there is an extising market demand for your shares in the United States. This is valuable to facilitating global liquidity in your shares.


If my company already has an unsponsored F share, why should I engage?

If you company has an unsponsored F share, it means that US investors are interested in your shares and are probably already trading off-exchange. However, your company news do not automatically reach the US market and your shares are therefore not being traded as much as they deserve. You should seize the opportunity to sponsor your F share and ensure that there is a constant flow of valuable company information reaching the US market to maximise liquidity and visibility of your domestic shares in the United States. This will add value to your shares domestically and benefit your shareholders.


What if the ticker ends on a "Y"?

If the ticker ends with the letter "Y", this means that it is not an F share, but a Y share. Y shares designate American Depositary Receipts (ADR) that are being traded in the US market. Banks or other depositary institutions will hold foreign shares and issue receipts for them. This is called an ADR. The ADR will be denominated in a ratio of one ADR to X-number of foreign shares. Like F shares, ADR can be sponsored or unsponsored and will be traded in the US OTC market.


Who else has F shares on OTCQX International?

More than 3,700 companies with primary listings on more than 30 global markets, such as London, Frankfurt, Paris, Madrid, Milan, Copenhagen and Stockholm, have an F share on OTC Markets. These companies include amongst others Air Canada, Bombardier, Endeavour Mining, Atlantic Sapphire, etc. The most recent market information on OTCQX International is available here.


How can I get an F share?

If your company wants to be cross-traded on OTCQX International in the United States, get in touch and your company will be allocated a ticker symbol in the process. Your designated market maker will file a Form 211 with FINRA to obtain a ticker as part of a sponsored process.


How are F shares traded?

US broker-dealers continuously price F shares in accordance with local market share price movements and available liquidity. While trades are executed in US dollars by US broker-dealers, the shares are settled, cleared and custodised in your local market. Trading of your F share in the US increases your overall global liquidity. It is therefore in your best interest to promote this trading by providing further information and disclosures to the US market.


What does an F share mean for US investors?

When a US investor researches and trades a non-US security, it is frequently through the F share ticker as US brokerage accounts often only display US ticker symbols. From the perspective of an investor, trading an F share is similar to trading a US security. US investors can trade in US dollars during US trading hours through the retail, online or institutional broker-dealer of their choice.


How can I improve the visibility and liquidity of my F share?

If your company is listed on a recognised stock exchange in the Nordics, such as Nasdaq Copenhagen or Nordic Growth Market, then you will already be making high quality disclosure available to the market via your home country primary stock exchange. However, this highly valuable valuable information, your company news and most up-to-date financials do not automatically reach US investors. It is therefore in your best interest to take the necessary steps to ensure that your Nordic disclosures and financials are easily available to your key audiences in the United States and that your company news is available in places where US investors conduct their research on you and make their investment decisions.


How are investors that trade through the F share recorded on Shareholder Lists?

US investors that purchase the F share appear on your company’s shareholder list based on the local disclosure requirements in the same manner as an investor that purchases shares in your home market.


Who can I contact to move this forward?

If you want to know more or want to obtain US market entry via an OTCQX quotation, please contact any of Brad Furber, Michael Rosenberg or Andreas Tamasauskas at Carsted Rosenberg to discuss how we can move your transaction forward. As an OTCQX Sponsor, we are here to help you.


This briefing is intended to provide general information for Nordic, DACH and other foreign issuers related to joining OTCQX or OTCQB markets. It is not intended to provide definitive legal or tax advice. No legal, tax or business decisions should be based solely on its content. The briefing does not necessarily deal with every important topic and is not designed to provide legal or other advice. It shall not be used as a substitute for legal advice and none may be inferred. It is only intended for general information on matters of interest. While we endeavour to represent the information as accurately and correctly as possible, we cannot accept any responsibility for any errors or omissions.


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