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:
- Net tangible assets of $4 million,
- $50 million market capitalization, or
- 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.
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FAQs
A company seeking to list existing securities or transfer to the NYSE must have at least 1.1 million publicly held shares and meet one of the following three criteria: Have at least 400 holders of 100 shares or more and an average monthly trading volume of at least 100,000 shares for the most recent six months.
What are the requirements for listing in the stock exchange market? ›
The company should have annual revenue of not less than Rs. 10 crores and should have shown an annual growth of alteast 20% in the past one year. (Annual growth may in the form of number of users/revenue growth/customer base). The net-worth should be positive.
What are the requirements for a full stock market listing? ›
The two most important categories of requirements deal with the size of the firm (as defined by annual income or market capitalization) and the liquidity of the shares (a certain number of shares must already have been issued).
What are the requirements to be on the stock market? ›
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.
What are listing regulations? ›
The Listing Regulations provide principles for disclosures by listed entities and also include corporate governance principles.
What is the minimum market cap for listing? ›
The market capitalization rule is a minimum threshold criterion for a company's total market value for it to be listed and remain listed on the New York Stock Exchange (NYSE). The market capitalization rule currently stands at $15 million over a consecutive 30-day trading period.
What is the 75% shareholding rule? ›
Here 'public' is defined as non-promoter shareholders. Where promoters are holding more than 75%, they have to mandatorily divest additional shares to the public to comply with the MPS rule. This MPS rule was first implemented after the amendment to the Securities Contracts Regulation Rules by SEBI in 2010.
What are the requirements for NYSE new listing? ›
New York Stock Exchange Listing Requirements
| Requirements | Standard 1 |
|---|
| Global Market Capitalization | $500,000,000 |
| Revenues (most recent 12-month period) | $100,000,000 |
| Aggregate Cash Flow for last 3 years | $25,000,000 (all 3 years must be positive) |
| Minimum Cash Flow in each of 2 preceding years | N/A |
25 more rowsSep 25, 2023
The applicant company should have been listed on any other recognized Stock Exchange for at least last three years or listed on the exchange having nationwide trading terminals for at least six months. Minimum average daily turnover during last 6 months (value) - Rs. 10 lakhs.
What are the disadvantages of listing? ›
Disadvantages
- high cost of listing and subsequent higher costs of compliance with specific regulation.
- uncertain timing of listing.
- burden of additional regulatory requirements and compliance with strict standards of corporate governance.
- loss of control over the company, which may eventually be taken over.
Unlike many misconceptions, there is no strict minimum limit to commence trading or investing in Indian stocks. Your starting point depends on having sufficient funds to purchase stocks based on their current share prices, which can range from Rs. 1 to Rs. 10,000 or more on Indian stock exchanges.
What listing is mandatory in market? ›
The mandatory T+3 listing means that HNI (high networth individual) clients opting for IPO funding will experience a reduction in interest payment duration, down from around 7 days to a mere 4 days.
How hard is it to get listed on the NYSE? ›
The Requirements To Get Listed on the NYSE
There must be at least 400 shareholders who own at least 100 shares of company stock. The company must have at least 1.1 million shares of publicly traded stock with a share price of at least $4 per share.
What is the basic rule of the stock market? ›
Stock Market Supply and Demand
Because of the immutable laws of supply and demand, if there are more buyers for a specific stock than there are sellers of it, the stock price will trend up. Conversely, if there are more sellers of the stock than buyers, the price will trend down.
How much does it cost to get listed on OTC? ›
OTC Listing Requirements
| Application Fees | OTCQX | OTC Pink |
|---|
| Application Fee | $5,000 | $1,000 |
| Annual Fee | $23,000 | $5,000 |
Before options can be written, a stock must be properly registered, have a sufficient number of shares, be held by enough shareholders, have sufficient volume, and be priced high enough.
What is the stock requirement list? ›
The Stock requirement list is used to display the real time stock situation and all the demand and supply elements. This is (arguably) the most important report for the logistics function in SAP as it displays anything and everything happening in the logistics area.
What are the rules for public company listing? ›
Admission criteria
Your company must have at least 300 non-affiliated shareholders, each of whom has a holding with a value of at least $2,000 which is not subject to ASX-imposed or voluntary escrow. You do not need to have the required spread or free float before the listing application is made.
What is the capital requirement for listing? ›
Post issue paid up capital of the Broking Member should be minimum Rs. 3 crores.
