Stock Markets and Listing Requirements

There are numerous national and regional markets where securities are bought and sold. The three major markets in the U.S. are the NASDAQ National Market, the New York Stock Exchange and the American Stock Exchange.

In order to have shares of your company bought and sold in these markets, your company must meet their listing requirements. The general listing requirements for each of these markets are as follows:

NASDAQ National Market (NASDAQ)

The NASDAQ National Market imposes minimum bid price, quantitative and other criteria in determining whether a company will be permitted to list its stock on the NASDAQ.

• Initial Minimum Bid Price for Stock: The stock must have a minimum initial bid price of $5.00, and must later remain at or above $1.00. This requirement serves as a safeguard against certain market activities associated with low-priced securities, and protects the credibility of the NASDAQ market.
• Quantitative Requirements: To be listed on the NASDAQ National Market, a company must have net tangible assets of $6 million and net income in the latest fiscal year or two of the past three fiscal years of $1 million. In addition, these companies must have a public float of $1.1 million, a market value of the public float of $8 million, a minimum of 400 shareholders, and at least three market makers.
• Capitalization Alternative: Companies that do not meet the quantitative requirements may nevertheless be listed on NASDAQ if they have a market capitalization of $75 million or total assets of $75 million and total revenues of $75 million, an initial minimum bid price of $5.00, and meet certain other requirements.
• Peer Review Requirement: The practices of all independent auditors for companies listed on the NASDAQ are subject to monitoring under a peer review system. Also, the quality control systems of accounting firms of NASDAQ-listed companies are reviewed by peers every three years.

NASDAQ SmallCap Market Listing Requirements

Small capitalization companies can be listed on the NASDAQ SmallCap Market if they have either:

1. Net tangible assets of $4 million,
2. $50 million market capitalization, or
3. Net income in the latest fiscal year or two of the past three fiscal years of $750,000.

In addition, these companies must have a public float of $1 million, a market value of the public float of $5 million, a minimum of 300 shareholders, and at least three market makers. Also, these companies must have an operating history of at least one year or $50 million market capitalization. The initial minimum bid price is $4.00 and the same ongoing minimum bid price and peer review requirements as are set forth above apply.

New York Stock Exchange (NYSE)

The New York Stock Exchange imposes minimum quantitative standards relating to distribution and size criteria and financial criteria.

• Distribution and Size Criteria: To be traded on the NYSExchange, a company must meet certain requirements as to the number of shareholders, must have a market value of public shares of $100 million or an IPO market value of $60 million.
• Financial Criteria: The company must have pretax earnings of $4.5 million in the most recent year or $6.5 over the past three years, operating cash flow of $25 million aggregate over the past three years or revenues of $250 million for the most recent year. Other factors are considered as well, and the NYSE has broad discretion regarding the listing of a company.

American Stock Exchange (AMEX)

• Regular Financial Guidelines: The American Stock Exchange requires pre-tax income of $750,000 for most recent fiscal year or two out of the most three recent fiscal years, a market value of public float of $3 million, an initial minimum bid price of $3 and stockholder’s equity of $4 million. There are no operating history requirements under the regular financial guidelines.
• Alternate Financial Guidelines: The American Stock Exchange also permits listing under its Alternate Financial Guidelines, provided a company has a market value of public float of $15 million, an initial minimum bid price of $3 and stockholder’s equity of $4 million. The company must have a three-year operating history under this guideline, but there are no pre-tax income requirements.

Note: Under either the Regular Financial Guidelines or under the Alternate Financial Guidelines, there are alternative additional requirements as to public float, number of stockholders, and average daily trading volume.

Free Initial Consultation with a Stock Market Lawyer

When your company needs help with securities issues or the stock market, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael Anderson

People who want a lot of Bull go to a Butcher. People who want results navigating a complex legal field go to a Lawyer that they can trust. That’s where I come in. I am Michael Anderson, an Attorney in the Salt Lake area focusing on the needs of the Average Joe wanting a better life for him and his family. I’m the Lawyer you can trust. I grew up in Utah and love it here. I am a Father to three, a Husband to one, and an Entrepreneur. I understand the feelings of joy each of those roles bring, and I understand the feeling of disappointment, fear, and regret when things go wrong. I attended the University of Utah where I received a B.A. degree in 2010 and a J.D. in 2014. I have focused my practice in Wills, Trusts, Real Estate, and Business Law. I love the thrill of helping clients secure their future, leaving a real legacy to their children. Unfortunately when problems arise with families. I also practice Family Law, with a focus on keeping relationships between the soon to be Ex’s civil for the benefit of their children and allowing both to walk away quickly with their heads held high. Before you worry too much about losing everything that you have worked for, before you permit yourself to be bullied by your soon to be ex, before you shed one more tear in silence, call me. I’m the Lawyer you can trust.

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