Stock Exchange Listing Requirements

NASDAQ National Market

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.
  • Quantitative Requirements : 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.
  • 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

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

  1. net tangible assets of $4 million, or
  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

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 (NYSE Alternext)

  • 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.
  • Alternate Financial Guidelines : 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.

Boston Stock Exchange

  • Distribution and Size Criteria : 750,000 shares in public float, $1,500,000 market value of float, and a minimum bid of $2. In addition there is a merit review.
  • Financial Criteria : Total assets of $3,000,000, tangible assets of $2,000,000, intangible assets of $2,000,000 as defined by BSE, $100,000 net income in 2 of the past 3 years or 2 million in net tangible assets, and shareholder equity of $1,000,000.

Chicago Stock Exchange

  • Distribution and Size Criteria : 500,000 shares in the public float held by 800 shareholders or 1,000,000 shares held by 400 shareholders, a minimum bid of $5 per share, and $3,000,000 in market value of public float.
  • Financial Criteria : Net tangible assets of $4,000,000, $750,000 pre-tax and $400,000 net income in 2 of the most recent 3 years

Alternate

  • Distribution and Size Criteria : 1,000,000 shares in the public float held by 400 shareholders and a minimum bid of $3 per share, and $3,000,000 in market value of public float.
  • Financial Criteria : Net tangible assets of $12,000,000 with 3 years of operations

Tier II

  • Distribution and Size Criteria : 250,000 shares in the public float held by 500 shareholders.
  • Financial Criteria : Net tangible assets of $2,000,000 with 3 years of operations, and demonstrated ability to produce adequate net earnings.

Pacific Stock Exchange

  • Distribution and Size Criteria : 500,000 shares in the public float held by 800 shareholders with a market value of $3,000,000 and a minimum bid price of $5.00 or 1,000,000 shares in the float with a market value of $15,000,000 held by 400 shareholders and a minimum bid of $3.00.
  • Financial Criteria : Net worth of $4,000,000, $750,000 in pre-tax income, and $400,000 net income, or $12,000,000 in net worth and 3 years of operating history.

Tier II

  • Distribution and Size Criteria : 500,000 shares in the public float held by 500 shareholders with a market value of $1,500,000 and a minimum bid price of $3 per share or 1,000,000 shares in the public float held by 500 shareholders and a minimum bid price of $1 per share.
  • Financial Criteria : Net tangible assets of $2,000,000, net income of $100,000 and 3 years of operating history or a net worth of $8,000,000.

Philadelphia Stock Exchange

  • Net Tangible Assets : Total Assets (including the value of patents, copyrights and trademarks but exclude the value of goodwill) less total liabilities of at least $4,000,000. Pre-tax income of $750,000 and net income of at least $400,000 in its last fiscal year.
  • Public Distribution : At least 500,000 publicly held shares and at least 800 public shareholders if the issuer has between 500,000 and 1 million shares publicly held, or at least 400 public shareholders if the issuer has either (i) over 1 million shares publicly held or (ii) over 500,000 shares publicly held and average daily trading volume in excess of 2,000 shares per day for a six month period.
  • Stock Price/Market Value : $5 per share on each of the five business days prior to the application date and $3,000,000 aggregate market value.

Alternative

  • Net Tangible Assets : Total Assets less total liabilities must be $12 million;
  • Public Distribution : 1,000,000 shares publicly held with at least 800 public shareholders if the issuer has between 500,000 and 1 million shares publicly held, or at least 400 public shareholders if the issuer has either (i) over 1 million shares publicly held or (ii) over 500,000 shares publicly held and average daily trading volume in excess of 2,000 shares per day for a six month period.
  • Stock Price/Market Value : Stock price of $3 per share on each of the five business days prior to the application date and aggregate Market Value of $15,000,000

OTC Bulletin Board (administered by NASDAQ)

  • Financial Requirements : No minimum shareholder equity or income. Companies must be reporting companies, providing an annual report to shareholders, current in all its filings, and subject to SEC proxy rules.
  • Distribution and Size Criteria : No minimum number of shareholders or shares outstanding, other than having a sufficient number of shareholders and shares outstanding to allow a trading market.
  • SEC status : Listed companies must have completed a registration of the company or its securities and have reporting company status. Companies must be current in all their filings. New shell companies will not be granted a trading symbol.

Companies with securities quoted on the OTCBB are subject to periodic reporting of financial information to the SEC. Issuers who file with the SEC via EDGAR are not required to submit hard copy filings with the OTCBB or the NASDAQ. Unlike all other exchanges, stocks trading on the OTC Bulletin Board cannot be shorted.