Tag Archives: Listing Requirements

What are the listing requirements for the Nasdaq?

Major stock exchanges, like the Nasdaq, are exclusive clubs – their reputations rest on the companies they trade. As such, the Nasdaq won’t allow just any company to be traded on its exchange. Only companies with a solid history and top-notch management behind them are considered. 

The Nasdaq has three sets of listing requirements. Each company must meet at least one of the three requirement sets, as well as the main rules for all companies.

Listing Requirements for All Companies
Each company must have a minimum of 1,250,000 publicly-traded shares upon listing, excluding those held by officers, directors or any beneficial owners of more then 10% of the company. In addition, the regular bid priceat time of listing must be $4, and there must be at least three market makers for the stock. However, a company may qualify under a closing price alternative of $3 or $2 if the company meets varying reequirements. Each listing firm is also required to follow Nasdaq corporate governance rules 4350, 4351 and 4360. Companies must also have at least 450 round lot(100 shares) shareholders, 2,200 total shareholders, or 550 total shareholders with 1.1 million average trading volume over the past 12 months.

In addition to these requirements, companies must meet all of the criteria under at least one of the following standards.

Listing Standard No. 1
The company must have aggregate pre-tax earnings in the prior three years of at least $11 million, in the prior two years at least $2.2 million, and no one year in the prior three years can have a net loss.

Listing Standard No. 2
The company must have a minimum aggregate cash flow of at least $27.5 million for the past three fiscal years, with no negative cash flow in any of those three years. In addition, its average market capitalization over the prior 12 months must be at least $550 million, and revenues in the previous fiscal year must be $110 million, minimum.

Listing Standard No. 3
Companies can be removed from the cash flow requirement of Standard No. 2 if the average market capitalization over the past 12 months is at least $850 million, and revenues over the prior fiscal year are at least $90 million.

A company has three ways to get listed on the Nasdaq, depending on the underlying fundamentals of the company. If a company does not meet certain criteria, such as the operating income minimum, it has to make it up with larger minimum amounts in another area like revenue. This helps to improve the quality of companies listed on the exchange.

It doesn’t end there. After a company gets listed on the market, it must maintain certain standards to continue trading. Failure to meet the specifications set out by the stock exchange will result in its delisting. Falling below the minimum required share price, or market capitalization, is one of the major factors triggering a delisting. Again, the exact details of delisting depend on the exchange.

Summary of the Listing Requirements

Summary of the Listing Requirements of the NYSE, AMEX, TSX,
Nasdaq, TSX Venture Exchange, CNSX and US OTCBB

* last updated August 26, 2010



As a company you have several decisions to make when selecting a secondary trading system for your publicly held securities. First, do you go with a formal exchange or do you chose a quotation system. NYSE, NYSE-Amex, NASDAQGM, NASDAQCM, TSX, TSX Venture and the CNSX are all formal exchanges.  OTCBB and the Pink Sheets are both quote systems. 
Another decision is where to list. Some choices will be eliminated on the basis that your company doesn’t meet the listing requirements of all secondary trading systems. Out of the choices which remain you will need to decide which market will serve you and your stockholders best. You also always have the option of moving to a different trading system as your economic and stockholder needs change.

A master chart summarizing the main North American markets you may chose to list your company’s securities follows. This chart provides a general overview of the minimum tier requirements for technology and industrial companies.  It is important to understand that several of these trading systems have more than one tier or standard with different requirements for each.   The TSX Venture Exchange, for instance, has three tiers and different requirements for mining, oil and gas, technology, industrial, and real estate companies and a separate category for their version of blank check companies.

You can access more information about a specific exchange or quotation system by  following the page link to our summary of the listing requirements of that exchange or quotation system. Note: The NYSE requirements in this chart are incomplete as they do not include the financial criteria tests required to be met prior to listing.  The standard for listing on the NYSE is much higher than may be presumed by this chart.

Skip to Listing Requirement Summary of:

NYSENYSE-Amex , TSXNASDAQGMNASDAQCMTSX Venture,CNSXOTCBBUS Pink Sheets

Summary of Listing Requirements: Master Chart

Requirements

NYSE1

NYSE-Amex2

TSX3

NASDAQGM4

NASDAQCM5

TSX Venture6

CNSX7

OTCBB8

Pre-Tax Income Last Year

$2,000,000
(minimum multi-tiered formula)

a. $750,000

b. N/A

c. N/A

d. N/A

a. C$300,000

b. C$200,000

c. C$200,000

a. $1,00,000

b. N/A

c. N/A

d. N/A

a. N/A

b. N/A

c. $ 750,000

Tier 1: $5,000,000 in NTA; or $5,000,000 in revenue

N/A

N/A

Two Year Avg Pre-Tax Income

$2,000,000
(minimum multi-tiered formula)

a. $750,000 (2 out of 3 years)

b. N/A

c. N/A

d. N/A

a. C$500,000

a. $1,000,000(2 out of 3 years)

b. N/A

c. N/A

d. $75,000,000 (2 out of 3 years)

a. N/A

b. N/A

c. $ 750,000 (2 out of 3 years)

Tier 2: $750,000 in NTA; or $500,000 in revenue or $2,000,000 in arms-length financing

N/A

N/A

Net Tangible Assets

N/A

a. N/A

b. N/A

c. N/A

d. $75,000,000 (or equiv market cap)

a. C$7,500,000

b. C$2,000,000

c. C$7,500,000

d. N/A

e. N/A

a. N/A

b. N/A

c. N/A

d. $75,000,000 and $75,000,000 Total Revenue

N/A

see above

N/A

N/A

Mrkt Value Publicly Held Stock

$100,000,000

OR

$40,000,000 (if IPO)

a. $3,000,000

b. $15,000,000

c. $15,000,000

d. $20,000,000

C$4 mil. (Ind)

C$10 mil. (tech)

a. $8,000,000

b. $18,000,000

c. $20,000,000

d. $20,000,000

a. $15,000,000

b. $15,000,000

c. $5,000,000

Tier 1: $150,000

Tier 2: $75,000

$50,000

N/A

# of Shares Publicly Held

1,100,000

500,000 (if 800 public shrldrs)

1,000,000 (if 400 public shrhldrs)

500,000 (if 400,000 public shrdlrs and daily trading vol. of 2,000 shares recent six  months)

1,000,000

1,100,000

1,000,000

Tier 1: 1,000,000 or 20% of Float

Tier 2: 500,000 or 20% of Float

500,000

10% of Float

25,000

# Public Board Lot Holders

a. 400 (US)

b. 2,200 (if monthly trading vol. of 100,000 shares recent 6 months)

c. 500 (if monthly trading vol. 1,000,000 shares  recent 12 months)

see above

300

400

300

Tier 1: 200

Tier 2: 250

150

40

Trading Price of Listed Securities

$4.00

a. $3.00

b. $3.00

c. $2.00

d. $3.00

No Minimum

$4.00

$4.00

No Minimum

(IPO minimum of $0.15 per share)

No Minimum

No Minimum

Shareholders Equity

No Minimum

a. $4,000,000

b. $4,000,000

c. $4,000,000

d. N/A

No Minimum

a. $15,000,000

b.$30,000,000

c. N/A

d. N/A

a. $5,000,000

b. $4,000,000

c. $4,000,000

No Minimum

No Minimum

No Minimum

Go to the individual listing requirement pages of each exchange:

NYSENYSE-Amex , TSXNASDAQGMNASDAQCMTSX VentureCNSXOTCBBUS Pink Sheets
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