There are some significant differences between the process for OTC markets and the process for an exchange. When completing a direct listing on an exchange, the exchange immediately issues a trading symbol, and the shares are immediately available for sale by the selling stockholders at prevailing market prices. If a company wants to trade with an OTC Markets direct listing, it must work with a market maker to file a form 211 application with FINRA.
The NYSE had to change its rules in order to complete the direct listing process. Although NASDAQ already allows for direct listings, they have historically been infrequently used. On the contrary, a direct listing has frequently been used as a method of going public on the OTC markets and, in the aftermath of Spotify, may gain popularity on national exchanges as well.
In a direct listing process, a company completes one or more private offerings of its securities, raising funds in advance, and then files a registration statement with the SEC to register the shares purchased by private investors. Although a placement agent can be used to assist in the private offering, it is not required. The company has benefited from receiving funds much earlier in the process, rather than after a registration statement has been approved by the SEC. In a traditional IPO process, the cost of completing an audit and legal fees associated with the registration process is expensive and is usually borne up front prior to receiving investor funds.