November 7, 2019
Subject: Release No. 34-87115 File No. S7-14-19
From: Laura Coffman
Affiliation: Student
I am always in favor of increasing transparency and efficiency while decreasing fraud. However, my concern with Release no. 34-87115 is that it will have little to no effect on mitigating fraudulent reporting and may also very negatively impact the investors the SEC is aiming to protect. It may also negatively impact many smaller OTC companies.
Failing to mitigate fraud: Solid OTC companies already practice reporting to investors. How does this proposed change stop issuers from falsifying financials in another capacity?
Harming current OTC holders: This could cause a mass dumping of OTC securities, leading to a sharp decline in value. This could severely financially injure current holders of OTC securities. This only freezes or impedes free trading in the marketplace.
Harming Legitimate Small Companies: Some smaller companies capacitate sound and compliant financials and only have access to funds through OTC securities. Listing with the SEC is costly, and many small companies cannot afford to do so. Investors may still request financials from these companies prior to investing.