Tag Archives: Nasdaq Capital Market

Frequently Asked Questions

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FAQ – Where are the necessary listing forms and instructions to list on NASDAQ?

Listing applications and related forms are available electronically through the NASDAQ OMX Listing Center. Before completing your application electronically, please take a few minutes to review our Initial Listing Guide. Generally, the company will need to complete the Listing Application, Listing Agreement, Corporate Governance Certification Form and Logo Submission Form. If you are unfamiliar with the contents of the Listing Application and related forms, we recommend that you preview the forms prior to logging into the Listing Center. This will help you gather all the information you will need to complete the forms.  Questions regarding the listing process should be directed to Listing Qualifications Staff at +1 877 536 2737.

Publication Date*: 7/31/2012 Identification Number: 332 Mailto Link

FAQ – What documentation does a company need to submit with an application?

In addition to a completed Listing Application, a company needs to submit a Listing Agreement, Corporate Governance Certification and Logo Submission Form, which are all available electronically through the Listing Center.  Prior to approval, NASDAQ will require additional information and supporting documentation.  See the types of documents that need to be submitted for each application type here. The only document required for original submission is the application itself and the application processing fee ($25,000 for Global and Global Select Market applicants or $5,000 for Capital Market applicants).
Publication Date*: 7/31/2012 Identification Number: 333 Mailto Link

FAQ – What types of documents should be uploaded with an application?

Please refer to this chart for the types of documents that need to be uploaded for each application type. The only document required for original submission in the application itself and the application processing fee.
* The Listing Agreement and Corporate Governance Certification Form are only required for issuers who do not currently have products listed on Nasdaq.
Publication Date*: 7/31/2012 Identification Number: 50 Mailto Link

FAQ – How does a company reserve a symbol to trade on NASDAQ?

A company may request a symbol for trading on The NASDAQ Stock Market by using our online form.
A company may request to reserve a symbol up to 24 months in advance of an initial listing application submission. If the symbol is not used during the 24-month reservation period, it will be made free and available for other potential applicants. A company may then re-apply for a symbol reservation after the original reservation expires provided that no other company has reserved the symbol. A reserved symbol may also be released at any time with given notice. A new symbol reservation can then be made if the applicant wishes to change its reserved symbol, assuming the new symbol is free and available.
The NASDAQ Stock Market does not reserve symbols for the OTCBB or the OTC Markets. Symbol reservations for OTCBB or OTC Markets are managed by FINRA. Any inquiries regarding symbol reservation for OTCBB or the OTC Markets should be forwarded to otcsymbols@finra.org.

Publication Date*: 7/31/2012 Identification Number: 486 Mailto Link

FAQ – Does NASDAQ require companies to sign a Listing Agreement, and where is it located on the website?

NASDAQ requires each company to sign a Listing Agreement prior to listing on NASDAQ. Listing Agreements may be completed electronically through the Listing Center along with your application.

Publication Date*: 7/31/2012 Identification Number: 404 Mailto Link

FAQ – Does NASDAQ offer a preliminary listing eligibility review for prospective applicants?

Yes. A company can seek a preliminary listing eligibility review by NASDAQ’s Listing Qualifications Department prior to applying. Pursuant to this review, the Listing Qualifications Staff will review the company’s public filings to determine if it meets the numerical listing requirements. In addition, to the extent questions are raised by the company, the Listing Qualifications Staff will consider compliance with the corporate governance requirements of Listing Rule 5600, such as board and board committee structure, and regulatory concerns, such as may be raised under Listing Rule 5101 and IM-5101-1. In considering whether any such questions exist, the company may find it helpful to review the information necessary to be submitted in response to the “Regulatory Proceedings/Litigation” section of the Listing Application. You may view the Listing Application and related forms using our preview function.
The Listing Qualifications Staff will, if necessary, meet with a prospective applicant to discuss any preliminary conclusions reached during this review. Once completed, Staff will determine whether it appears that the company satisfies NASDAQ’s numerical initial inclusion criteria and whether any corporate governance or regulatory issues raised by the company would serve to prohibit NASDAQ from listing the company. Any final approval, however, will require the company to submit a formal listing application, and is conditioned upon final review of that application and the company’s continued compliance with all NASDAQ criteria for initial listing at the time of listing. In addition, any final approval will require a satisfactory conclusion of certain additional qualitative reviews that NASDAQ will perform, including a review of the regulatory history of the company’s officers, directors, and significant shareholders.
Companies interested in this preliminary review process should contact Robert McCooey, Senior Vice President, New Listings and Capital Markets via email at bob.mccooey@nasdaqomx.com or by phone at +1 212 401 8724.

Publication Date*: 7/31/2012 Identification Number: 328 Mailto Link

FAQ – Can a company proceed with the submission of a listing application even if not all of the information requested in the application is available at the time?

If a company does not have all the necessary information currently available, it may submit a substantially completed application provided that the remaining information follows in a timely manner.
Publication Date*: 7/31/2012 Identification Number: 335 Mailto Link

FAQ – In the case of a company that is planning an initial public offering, at what point in the IPO process should a Listing Application be submitted to NASDAQ?

A Listing Application should be submitted at the same time that a company submits its registration statement to the SEC. A company may also submit the Listing Application at an earlier time with draft registration material.
Publication Date*: 7/31/2012 Identification Number: 334 Mailto Link

FAQ – If a Listing Application is denied, may the company appeal NASDAQ’s determination?

If the NASDAQ Staff determines to deny a Listing Application, the company may appeal NASDAQ’s determination to deny initial inclusion. See Hearings Process FAQs for additional information.
Publication Date*: 7/31/2012 Identification Number: 349 Mailto Link

FAQ – What is the NASDAQ Global Select Market?

The NASDAQ Global Select Market is a tier of the NASDAQ Stock Market LLC, which has the highest initial listing standards of any stock market in the world. Companies listed on the Global Select Market must meet financial and liquidity requirements and satisfy corporate governance and disclosure requirements on both an initial and ongoing basis.The same continued listing requirements apply to companies on the NASDAQ Global Select Market and the NASDAQ Global Market.

The NASDAQ Global Market, including the NASDAQ Global Select segment, is the successor to the Nasdaq National Market. As such, NASDAQ believes that all securities listed on the NASDAQ Global Market, including those on the Nasdaq Global Select Market, are ”covered securities,” as that term is defined in Section 18(b) of the Securities Act of 1933.

At any time, a company currently listed on the NASDAQ Global Market can submit a transfer application to move its securities to the NASDAQ Global Select.  There are no application or entry fees associated with this application, which is available electronically through the Listing Center.

For detailed information on NASDAQ listing standards see the Initial Listing Guide and the Continued Listing Guide.

Publication Date*: 11/21/2013 Identification Number: 1081 Mailto Link

FAQ –  Is there a document that describes Nasdaq’s initial listing standards and fees?

Yes.  Please refer to our Initial Listing Guide for important information about Nasdaq’s initial listing standards, application process, and fees.

Publication Date*: 7/31/2012 Identification Number: 1052 Mailto Link

FAQ – Are securities listed on The NASDAQ Capital Market granted automatic “blue sky” exemptions?

Yes. The SEC approved a modification to Securities Act Rule 146 to designate securities listed on The NASDAQ Capital Market as “covered” securities, which makes them exempt from state “blue sky” registration requirements. The Order became effective on May 24, 2007. To view the SEC Approval Order, please click here. Please note that NASDAQ Global Select Market and NASDAQ Global Market securities are currently subject to a “blue sky” exemption contained in the Securities Act of 1933.
Publication Date*: 7/31/2012 Identification Number: 330 Mailto Link

FAQ – Does NASDAQ have the authority to deny a company or delist a company that otherwise meets the quantitative and qualitative criteria for initial or continued listing?

Yes. As set forth in Listing Rule 5101 and IM-5101-1, in addition to applying the enumerated criteria set forth in Listing Rules 5300540055005600 and5700, NASDAQ will exercise broad discretionary authority over the initial and continued inclusion of securities in NASDAQ in order to maintain the quality of and public confidence in its market.
Publication Date*: 7/31/2012 Identification Number: 415 Mailto Link

FAQ – What are the fees associated with listing on The NASDAQ Stock Market, and where should fee payments be sent?

A company is subject to a non-refundable application fee and a variable entry fee. The non-refundable application fee must be submitted with a company’s application. The variable entry fee is based on a company’s total shares outstanding and is due upon NASDAQ’s approval of the application and prior to listing. Once listed, companies are subject to additional fees when undertaking certain corporate actions, such as changing their name or listing additional shares. This fee can be paid by check or wire.

Publication Date*: 7/31/2012 Identification Number: 336 Mailto Link

FAQ – Are the first year’s annual fees pro-rated?

Yes. In the first year of listing, the company’s annual fee will be pro-rated based on the month of listing.
Publication Date*: 2/8/2013 Identification Number: 418 Mailto Link

FAQ –  What are the fees for a NASDAQ listed company to list a new class of securities?

When listing a new class of securities, a NASDAQ listed company will owe application and entry fees, as set forth in Listing Rule 5900 Series and further detailed in our Intial Listing Guide.  The application fee should be submitted at the time of application, and, shortly after listing, the company will be sent an invoice for the entry fee.Entry fees for listing a new class of securities are based on the total shares outstanding of the new security at the time of listing.   However, the total amount of entry fees owed by a company for all classes of securities listed on the Global Select or Global Market, including entry fees previously paid by the company for other classes, is presently capped at $225,000. Similarly, the total amount of entry fees owed by a company for listing on the Capital Market is presently capped at $75,000.  If a company has previously paid entry fees up to the applicable fee cap, then only the application fee is charged for listing the new class of securities.

In addition, the company will also owe an annual fee for the new class of securities.  In the year of listing, annual fees are pro-rated, based on the month of listing.  The company will be sent an invoice for the pro-rated annual fee shortly after listing.

Publication Date*: 8/20/2012 Identification Number: 1057 Mailto Link

FAQ – How should a company refer to NASDAQ in SEC filings that ask for the name of the exchange where the company is, or will be, listed or registered?

NASDAQ’s formal name, which should be included in SEC filings that ask for the name of the exchange where the company is, or will be, listed or registered, is The NASDAQ Stock Market LLC.

Publication Date*: 8/20/2012 Identification Number: 1055 Mailto Link

FAQ – What are the initial listing standards?

The goal of NASDAQ’s listing requirements is to facilitate capital formation for companies worldwide and, at the same time, to protect investors and prospective investors in those companies through the application of quantitative and corporate governance listing requirements, which are enforced through a transparent regulatory process.
NASDAQ has three marketplaces: The NASDAQ Global Select Market, The NASDAQ Global Market and The NASDAQ Capital Market. For detailed information on the listing standards for each marketplace, please see Initial Listing Guide. NASDAQ’s quantitative listing requirements generally call for companies to meet higher thresholds for initial listing than for continued listing.

Publication Date*: 7/31/2012 Identification Number: 327 Mailto Link

FAQ – Is registration under the Securities Exchange Act of 1934 required before a security can be admitted to trading on The NASDAQ Stock Market?

Yes. A security approved for listing by NASDAQ must be registered under Section 12(b) of the Securities Exchange Act of 1934 before it can be listed on The NASDAQ Stock Market. Exchange Act registration is required even though the applicant may have previously registered all or part of the securities under the Securities Act of 1933. A security which has already been registered under Section 12(g) of the Exchange Act, or has recently been the subject of a public offering registered under the Securities Act, can usually be registered under Section 12(b) by using SEC Form 8-A. If an applicant does not have a class of securities registered under the Exchange Act Section 12(g), filing of a SEC Form 10 may be required.
For companies that were listed on NASDAQ prior to it becoming a national securities exchange on August 1, 2006, the SEC and other regulators granted NASDAQ’s request to allow it to apply on behalf of its listed companies for registration under Section 12(b) of the Exchange Act. A copy of the SEC’s order granting this request can be found here.

Publication Date*: 7/31/2012 Identification Number: 329 Mailto Link

FAQ – What happens if a company fails to meet all of the listing requirements?

While NASDAQ’s rules provide for exceptions under certain circumstances, NASDAQ will not generally approve an application if the security does not meet all of NASDAQ’s initial listing requirements. However, the company may appeal an adverse determination and seek listing from a Listing Qualifications Hearings Panel. See Hearings Process FAQs for additional information.
Publication Date*: 7/31/2012 Identification Number: 339 Mailto Link

FAQ – When may a company that is formed by a Reverse Merger apply for a NASDAQ listing?

A company that is formed by a Reverse Merger is eligible to submit an application for initial listing only if the combined entity has, immediately before filing the listing application: (i) traded for at least one year in the U.S. over-the-counter market, on another national securities exchange, or on a foreign regulated exchange, following the filing with the SEC or other Regulatory Authority of all required information about the transaction, including audited financial statements for the combined entity; and (ii) maintained a closing price of $4 per share or higher for a sustained period of time, but in no event for less than 30 of the most recent 60 trading days.
In addition, such a company may only be approved for listing if, at the time of approval, it has: (i) timely filed all required periodic financial reports with the SEC or other Regulatory Authority (Forms 10-Q or 10-K) for the prior year, including at least one annual report and (ii) maintained a closing price of $4 per share or higher for a sustained period of time, but in no event for less than 30 of the most recent 60 trading days prior to approval.

Publication Date*: 7/31/2012 Identification Number: 348 Mailto Link

FAQ – Are companies required to comply with all listing requirements at the time of listing?

Companies must generally meet all listing requirements at the time of listing; however, consistent with the Securities and Exchange Act, a grace period of up to one year from the first trade date may be granted to companies completing initial public offerings to secure their independent directors and/or to establish audit, compensation, and nominating committees, which meet NASDAQ’s requirements.
Publication Date*: 7/31/2012 Identification Number: 338 Mailto Link

FAQ – Does NASDAQ require independent auditors to review company’s financial statements?

Each company listed on NASDAQ must be audited by an independent public accountant that is registered as a public accounting firm with the Public Company Accounting Oversight Board, as provided for in Section 102 of the Sarbanes-Oxley Act of 2002. In addition, under SEC rules, the auditor must review the company’s quarterly periodic reports. See Listing Rules 5210(b) and 5250(c)(3).

Publication Date*: 7/31/2012 Identification Number: 398 Mailto Link

FAQ – How does NASDAQ measure stockholders’ equity when qualifying a company for initial listing on The NASDAQ Stock Market?

To qualify a company for initial listing, NASDAQ uses the stockholders’ equity number as reported on a company’s most recent balance sheet. The company’s financial statements must be: (i) prepared in accordance with U.S. GAAP; (ii) reconciled to U.S. GAAP; or (iii) prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, for companies that are permitted to file financial statements using those standards with the SEC. NASDAQ reserves the right to make adjustments to estimate stockholders’ equity at the time of listing. For example, if a company has previously reported net losses, a burn rate may be calculated with the aid of historically published income statements and applied to estimate a company’s stockholders’ equity at the time of listing.
Publication Date*: 7/31/2012 Identification Number: 340 Mailto Link

FAQ – Does Nasdaq require listed companies to have a full-time Chief Financial Officer?

SEC rules and the Sarbanes-Oxley Act impose heightened obligation on the CFO of a public company, including the requirement to certify the company’s periodic financial statements.  Given the importance of this role, Nasdaq generally requires listed companies to employ a full-time CFO.

Publication Date*: 7/31/2012 Identification Number: 1049 Mailto Link

FAQ – Does NASDAQ review a company’s past corporate governance activities upon an application to list on The NASDAQ Stock Market?

When a company applies to list on NASDAQ and is currently traded on another exchange, or quoted on the Over-the-Counter Bulletin Board® or Pink Sheets, NASDAQ will review the company’s recent corporate governance activities. If the company is listed on another exchange, NASDAQ will request a representation from the company that it is in compliance with all of the corporate governance requirements of the exchange and has no past violations of these standards. In addition, NASDAQ may contact the exchange to confirm that the company has not been in violation of the exchange’s corporate governance requirements.
Publication Date*: 7/31/2012 Identification Number: 346 Mailto Link

FAQ – Are listed companies required to submit a certification of compliance with NASDAQ’s corporate governance rules?

Yes. As part of initial application process, each company completes a Corporate Governance Certification Form and submits this form along with its Listing Application. The form certifies the company’s compliance with NASDAQ’s requirements relating to the audit committee, the director nominating process, the determination of officer compensation, board composition, executive sessions, quorum and code of conduct. This form can be completed electronically after logging in to the Listing Center.
Once listed, companies do not need to submit annual certifications, but must update the form if a change in the company’s status results in the prior certification no longer being accurate.  For example, if a company indicated on its certification that it was not subject to a requirement because it was a controlled company, that company must submit a new form if it ceases to be a controlled company. Similarly, a Foreign Private Issuer that relied on an exemption in its certification would have to file a new certification if the company ceased to be a Foreign Private Issuer. To submit an updated Certification Form once the Company is already listed, log in to the Listing Center and complete a Company Event Notification Form.
Publication Date*: 5/23/2013 Identification Number: 400 Mailto Link

FAQ – Does NASDAQ require its listed companies to adopt a Code of Conduct?

Yes. NASDAQ listed companies are required to have a code of conduct that is applicable to all directors, officers and employees. The code of conduct must meet the definition of a “code of ethics” as set forth in Section 406(c) of the Sarbanes-Oxley Act of 2002. The code of conduct must be publicly available. In addition, any waivers of the code for directors or executive officers must be approved by the board. Companies, other than Foreign Private Issuers, shall disclose such waivers within four business days by filing a current report on Form 8-K with the Commission or, in cases where a Form 8-K is not required, by distributing a press release. Foreign Private Issuers shall disclose such waivers either by distributing a press release or including disclosure in a Form 6-K or in the next Form 20-F or 40-F. Alternatively, a company, including a Foreign Private Issuer, may disclose waivers on the company’s website in a manner that satisfies the requirements of Item 5.05(c) of Form 8-K.
Publication Date*: 7/31/2012 Identification Number: 99 Mailto Link

FAQ – How do the corporate governance requirements of Listing Rule 5600 apply to Foreign Private Issuers?

NASDAQ’s corporate governance requirements generally apply to Foreign Private Issuers (as defined in Listing Rule 5005). However, Listing Rule 5615(a)(3) permits a Foreign Private Issuer to follow home country governance practices in lieu of certain NASDAQ requirements provided the company properly notifies NASDAQ and makes the required disclosure.
Publication Date*: 7/31/2012 Identification Number: 156 Mailto Link

FAQ – How do the corporate governance requirements of Listing Rule 5600 apply to non-U.S. companies that are not Foreign Private Issuers?

Non-U.S. companies that are not Foreign Private Issuers are not eligible to receive exemptions from NASDAQ’s corporate governance requirements and must comply with all provisions of Listing Rule 5600.
Publication Date*: 7/31/2012 Identification Number: 162 Mailto Link

FAQ –  What are the requirements for a NASDAQ listed company to list a new class of securities?

Companies listed on NASDAQ must complete an application to list a new class of securities.  The application can be made through The NASDAQ OMX Listing Center.   Direct any questions about this to NASDAQ Listing Qualifications.

Publication Date*: 8/20/2012 Identification Number: 1058 Mailto Link

FAQ – How are a company’s publicly held shares calculated?

For the purposes of meeting NASDAQ’s listing requirements, publicly held shares equals total shares outstanding less insider holdings. Insider holdings include shares held by the company’s officers, directors, employee stock ownership plan and shareholders with 10% or greater beneficial ownership of the company’s shares.
Publication Date*: 7/31/2012 Identification Number: 341 Mailto Link

FAQ – How is market value of publicly held shares (“MVPHS”) calculated?

MVPHS is calculated by multiplying the publicly held shares, which is total shares outstanding less any shares held by officers, directors, employee stock ownership plans, or beneficial owners of 10% or more, by the closing bid price.
Publication Date*: 7/31/2012 Identification Number: 359 Mailto Link

FAQ – How does NASDAQ determine closing price for purposes of Listing Rule 5505(a)(1)(B)?

For a company that qualifies to list with a price of $2 or $3 under Listing Rule 5505(a)(1)(B), the closing price is the NASDAQ Official Closing Price, if there is one, or the consolidated closing price distributed under the applicable National Market System Plan if there is no NASDAQ Official Closing Price. The security must maintain the necessary closing price for five consecutive business days, but NASDAQ may extend this five day period, based on any fact or circumstance, including the margin of compliance, the trading volume, the Market Maker montage, the trend of the security’s price, or information or concerns raised by other regulators concerning the trading of the security.

Publication Date*: 7/31/2012 Identification Number: 1021 Mailto Link

FAQ – How does NASDAQ measure compliance with the initial listing price requirement when a company lists pursuant to an initial public offering?

An issuer listing on The NASDAQ Stock Market pursuant to an initial public offering satisfies the price requirement if its offering is priced at or above the required price.
Publication Date*: 7/31/2012 Identification Number: 342 Mailto Link

FAQ – How does NASDAQ measure compliance with the initial listing price requirement for a seasoned company?

A company that is already trading on another market must meet the applicable minimum price requirement on the date NASDAQ approves their listing application and is expected to list promptly thereafter.
For a company traded on a non-listed market, promptly generally means within five business days of approval. If the company is listed on another exchange, promptly generally means within fifteen business days of approval, to allow for the additional time required to effect the transfer from the other market.
In either case, if the company’s security qualifies under the alternative price listing standard with a bid price below $4, the security must meet the applicable $2 or $3 closing price for five consecutive business days in order to qualify.
Note: A company that qualifies for listing only under the market value of listed securities standard must also meet the price requirement for 90 consecutive trading days prior to applying for listing.

Publication Date*: 7/31/2012 Identification Number: 343 Mailto Link

FAQ – Can a seasoned issuer effect a reverse stock split to meet the minimum bid price requirement for initial listing?

A seasoned issuer may complete a reverse stock split to comply with NASDAQ’s minimum price requirement for initial listing. Generally, when this happens, NASDAQ will require that the issuer continue to meet the price requirement for a minimum of five consecutive trading days after the split takes place. This means that on each of the five days the issuer must at some point during normal trading hours have a price which is at or above the applicable initial listing criteria.
Please note that NASDAQ may, in its discretion, also require an issuer to maintain the required minimum price for a period in excess of five consecutive business days, but generally no more than ten consecutive business days, before determining that the issuer has demonstrated compliance. In determining whether to require a longer waiting period, NASDAQ will consider the following four factors:
  • Margin of compliance (the amount by which the price is above the minimum standard);
  • Trading volume (a lack of trading volume may indicate a lack of bona fide market interest in the security at the posted bid price);
  • Where applicable, the market maker montage (the number of market makers quoting at or above the minimum required bid and the size of their quotes); and,
  • The trend of the stock price (is it up or down?).
Publication Date*: 7/31/2012 Identification Number: 344 Mailto Link
*The Publication Date reflects the date of first inclusion in the Reference Library, which was launched on July 31, 2012, or a subsequent update to the material. Material may have been previously available on a different NASDAQ web site.

5500. The Nasdaq Capital Market

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5500. The Nasdaq Capital Market

5501. Preamble to The Nasdaq Capital Market Listing Requirements

This section contains the initial and continued listing requirements and standards for listing a Company’s Primary Equity Security on The Nasdaq Capital Market. This section also contains the initial and continued listing requirements for Rights and Warrants; Preferred and Secondary Classes of Common Stock; and Convertible Debt, Rights and Warrants on the Capital Market.

In addition to meeting the quantitative requirements in this section, a Company must meet the requirements of the Rule 5100 Series, the disclosure obligations set forth in the Rule 5200 Series, the Corporate Governance requirements set forth in the Rule 5600 Series, and pay any applicable fees in the Rule 5900 Series. A Company’s failure to meet any of the continued listing requirements will be processed in accordance with the provisions set forth in the Rule 5800 Series.

Companies that meet these requirements, but are not listed on the Nasdaq Global Market, are listed on the Nasdaq Capital Market.

Amended by SR-NASDAQ-2009-052 eff. June 16, 2009.

5505. Initial Listing of Primary Equity Securities

A Company applying to list its Primary Equity Security on the Capital Market must meet all of the requirements set forth in Rule 5505(a) and at least one of the Standards in Rule 5505(b).

(a) Initial Listing Requirements for Primary Equity Securities:

(1) (A) Minimum bid price of $4 per share; or

(B) Minimum closing price of $3 per share, if the Company meets the requirements of the Equity or Net Income Standards under Rules 5505(b)(1) or (b)(3), or of $2 per share, if the Company meets the requirements of the Market Value of Listed Securities Standard under Rule 5505(b)(2), provided that in either case the Company must also demonstrate that it has net tangible assets (i.e., total assets less intangible assets and liabilities) in excess of $2 million, if the issuer has been in continuous operation for at least three years; or net tangible assets in excess of $5 million, if the issuer has been in continuous operation for less than three years; or average revenue of at least $6 million for the last three years. A security must meet the applicable closing price requirement for at least five consecutive business days prior to approval.

For purposes of this paragraph (B), net tangible assets or average revenues must be demonstrated on the Company’s most recently filed audited financial statements filed with, and satisfying the requirements of, the Commission or Other Regulatory Authority, and which are dated less than 15 months prior to the date of listing.

(2) At least 1,000,000 Publicly Held Shares;

(3) At least 300 Round Lot Holders;

(4) At least three registered and active Market Makers;

(5) In the case of ADRs, at least 400,000 issued.

(b) Initial Listing Standards for Primary Equity Securities:

(1) Equity Standard

(A) Stockholders’ equity of at least $5 million;

(B) Market Value of Publicly Held Shares of at least $15 million; and

(C) Two year operating history.

(2) Market Value of Listed Securities Standard

(A) Market Value of Listed Securities of at least $50 million (current publicly traded Companies must meet this requirement and the price requirement for 90 consecutive trading days prior to applying for listing if qualifying to list only under the Market Value of Listed Securities Standard);

(B) Stockholders’ equity of at least $4 million; and

(C) Market Value of Publicly Held Shares of at least $15 million.

(3) Net Income Standard

(A) Net income from continuing operations of $750,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years;

(B) Stockholders’ equity of at least $4 million; and

(C) Market Value of Publicly Held Shares of at least $5 million.

Adopted March 12, 2009 (SR-NASDAQ-2009-018); amended April 18, 2012 (SR-NASDAQ-2012-002).

IM-5505. Initial Listing for Securities below $4

(a) Penny Stock Provisions. Rule 5505(a)(1)(B) provides an alternative initial listing requirement for certain companies with a minimum bid price below $4. A company that qualifies for initial listing only under this alternative could become a “penny stock” if it later fails the net tangible assets and revenue tests after listing and does not satisfy any of the other exclusions from being a penny stock contained in Rule 3a51-1 under the Act. In order to assist brokers’ and dealers’ compliance with the requirements of the Penny Stock Rules, Nasdaq will monitor companies listed under the alternative requirement and publish on its website on a daily basis a list of any company that initially listed under the alternative requirement, which no longer satisfies the net tangible assets or revenue test contained in Rule 5505(a)(1)(B), and which does not satisfy any of the other exclusions from being a penny stock contained in Rule 3a51-1 under the Act. If a company initially lists with a bid price below $4 under the alternative requirement contained in Rule 5505(a)(1)(B), but subsequently achieves a $4 closing price for at least five consecutive business days and, at the same time, satisfies all other initial listing criteria, it will no longer be considered as having listed under the alternative requirement and Nasdaq will notify the Company that it has qualified for listing under the price requirement contained in Rule 5505(a)(1)(A).

Brokers and dealers are reminded that the list published by Nasdaq is only an aid and that the Penny Stock Rules impose specific obligations on brokers and dealers with respect to transactions in penny stocks.

(b) Determination of closing price. For purposes of Rule 5505(a)(1)(B) and this IM- 5505, the closing price will be the Nasdaq Official Closing Price, if there is one, or the consolidated closing price distributed under the applicable National Market System Plan if there is no Nasdaq Official Closing Price. Nasdaq will require that a security maintain the necessary closing price for five consecutive business days, but may extend this five day period, based on any fact or circumstance, including the margin of compliance, the trading volume, the Market Maker montage, the trend of the security’s price, or information or concerns raised by other regulators concerning the trading of the security.

Adopted April 18, 2012 (SR-NASDAQ-2012-002).

5510. Initial Listing Requirements for Preferred Stock and Secondary Classes of Common Stock

(a) When the Primary Equity Security is listed on the Capital Market or is a Covered Security, a Company’s preferred stock or secondary class of common stock must meet all of the requirements in Rules (1) through (5) below in order to be listed.

(1) Minimum bid price of at least $4 per share;

(2) At least 100 Round Lot Holders;

(3) At least 200,000 Publicly Held Shares;

(4) Market Value of Publicly Held Shares of at least $3.5 million; and

(5) At least three registered and active Market Makers.

(b) In the event the Company’s Primary Equity Security is not listed on the Capital Market or is not a Covered Security, the preferred stock and/or secondary class of common stock may be listed on the Capital Market so long as it satisfies the initial listing criteria for Primary Equity Securities set forth in Rule 5505.

Adopted March 12, 2009 (SR-NASDAQ-2009-018).

5515. Initial Listing Requirements for Rights, Warrants, and Convertible Debt

The following requirements apply to a Company listing convertible debt, rights or warrants on The Nasdaq Capital Market.

(a) For initial listing, rights, warrants and put warrants (that is, instruments that grant the holder the right to sell to the issuing company a specified number of shares of the Company’s common stock, at a specified price until a specified period of time) must meet the following requirements:

(1) At least 400,000 issued;

(2) The underlying security must be listed on Nasdaq or be a Covered Security;

(3) At least three registered and active Market Makers; and

(4) In the case of warrants, at least 400 Round Lot Holders (except that this requirement will not apply to the listing of rights or warrants in connection with the initial firm commitment underwritten public offering of such warrants).

(b) For initial listing, a convertible debt security must meet the requirements in (1) through (3), and one of the conditions in (4) must be satisfied:

(1) Principal amount outstanding of at least $10 million;

(2) Current last sale information must be available in the United States with respect to the underlying security into which the bond or debenture is convertible;

(3) At least three registered and active Market Makers; and

(4)

(A) the issuer of the debt must have an equity security that is listed on Nasdaq, the American Stock Exchange or the New York Stock Exchange;

(B) an issuer whose equity security is listed on Nasdaq, the American Stock Exchange or the New York Stock Exchange, directly or indirectly owns a majority interest in, or is under common control with, the issuer of the debt security, or has guaranteed the debt security;

(C) a nationally recognized securities rating organization (an “NRSRO”) has assigned a current rating to the debt security that is no lower than an S&P Corporation “B” rating or equivalent rating by another NRSRO; or

(D) if no NRSRO has assigned a rating to the issue, an NRSRO has currently assigned: (1) an investment grade rating to an immediately senior issue; or (2) a rating that is no lower than an S&P Corporation “B” rating, or an equivalent rating by another NRSRO, to a pari passu or junior issue.

(c) In the case of Index Warrants, the requirements established in Rule 5725 for Nasdaq Global Market securities apply.

Adopted Mar. 12, 2009 (SR-NASDAQ-2009-018); amended Feb. 19, 2010 (SR-NASDAQ-2010-024).

5550. Continued Listing of Primary Equity Securities

A Company that has its Primary Equity Security listed on the Capital Market must continue to meet all of the requirements set forth in Rule 5550(a) and at least one of the Standards set forth in Rule 5550(b). Failure to meet any of the continued listing requirements will be processed in accordance with the provisions set forth in the Rule 5800 Series.

(a) Continued Listing Requirements for Primary Equity Securities:

(1) At least two registered and active Market Makers, one of which may be a Market Maker entering a stabilizing bid;

(2) Minimum bid price of at least $1 per share;

(3) At least 300 Public Holders;

(4) At least 500,000 Publicly Held Shares; and

(5) Market Value of Publicly Held Shares of at least $1 million.

(b) Continued Listing Standards for Primary Equity Securities:

(1) Equity Standard: Stockholders’ equity of at least $2.5 million;

(2) Market Value of Listed Securities Standard: Market Value of Listed Securities of at least $35 million; or

(3) Net Income Standard: Net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years.

Adopted March 12, 2009 (SR-NASDAQ-2009-018); amended June 16, 2009 (SR-NASDAQ-2009-052).

5555. Continued Listing Requirements for Preferred Stock and Secondary Classes of Common Stock

(a) When the Primary Equity Security is listed on the Capital Market or is a Covered Security, a Company’s preferred stock or secondary class of common stock must meet all of the requirements in (1) through (5) below in order to be listed. Failure to meet any of the continued listing requirements will be processed in accordance with the provisions set forth in the Rule 5800 Series.

(1) Minimum bid price of at least $1 per share;

(2) At least 100 Public Holders;

(3) At least 100,000 Publicly Held Shares;

(4) Market Value of Publicly Held Shares of at least $1 million; and

(5) At least two registered and active Market Makers, one of which may be a Market Maker entering a stabilizing bid.

(b) In the event the Company’s Primary Equity Security is not listed on the Capital Market or is not a Covered Security, the preferred stock and/or secondary class of common stock may be listed on the Capital Market so long as the security satisfies the continued listing criteria for Primary Equity Securities set forth in Rule 5550.

Adopted March 12, 2009 (SR-NASDAQ-2009-018).

5560. Continued Listing Requirements for Rights, Warrants, and Convertible Debt

(a) For rights, warrants, and put warrants (that is, instruments that grant the holder the right to sell to the issuing company a specified number of shares of the Company’s common stock, at a specified price until a specified period of time), the underlying security must remain listed on Nasdaq or be a Covered Security, and there must be at least two registered and active Market Makers, one of which may be a Market Maker entering a stabilizing bid.

(b) A convertible debt security must meet the following requirements for continued listing:

(1) A principal amount outstanding of at least $5 million;

(2) At least two registered and active Market Makers, one of which may be a Market Maker entering a stabilizing bid; and

(3) Current last sale information must be available in the United States with respect to the underlying security into which the bond or debenture is convertible.

Adopted March 12, 2009 (SR-NASDAQ-2009-018).

5400. The Nasdaq Global Market

 

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5400. The Nasdaq Global Market

 

5401. Preamble to The Nasdaq Global Market Listing Requirements

This section contains the initial and continued listing requirements and standards for listing a Company’s Primary Equity Security on The Nasdaq Global Market. This section also contains the initial and continued listing requirements for Rights and Warrants, and Preferred and Secondary Classes of Common Stock on the Global Market.

In addition to meeting the quantitative requirements in this section, a Company must meet the requirements of the Rule 5100 Series, the disclosure obligations set forth in the Rule 5200 Series, the Corporate Governance requirements set forth in the Rule 5600 Series, and pay any applicable fees in the Rule 5900 Series. A Company’s failure to meet any of the continued listing requirements will be processed in accordance with the provisions set forth in the Rule 5800 Series.

Companies that meet the requirements of the Rule 5500 Series, but are not listed on the Nasdaq Global Market, are listed on the Nasdaq Capital Market.

For the requirements relating to other securities listed on the Global Market, see the Rule 5700 Series.

Amended by SR-NASDAQ-2009-052 eff. June 16, 2009.

 

5405. Initial Listing Requirements and Standards for Primary Equity Securities

A Company applying to list its Primary Equity Security on the Global Market shall meet all of the requirements set forth in Rule 5405(a) and at least one of the Standards in Rule 5405(b).

(a) Initial Listing Requirements for Primary Equity Securities:

(1) Minimum bid price of at least $4 per share;

(2) At least 1,100,000 Publicly Held Shares; and

(3) At least 400 Round Lot Holders.

(b) Initial Listing Standards for Primary Equity Securities:

(1) Income Standard

(A) Annual income from continuing operations before income taxes of at least $1,000,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years;

(B) Stockholders’ equity of at least $15 million;

(C) Market Value of Publicly Held Shares of at least $8 million; and

(D) At least three registered and active Market Makers.

(2) Equity Standard

(A) Stockholders’ equity of at least $30 million;

(B) Two-year operating history;

(C) Market Value of Publicly Held Shares of at least $18 million; and

(D) At least three registered and active Market Makers.

(3) Market Value Standard

A Company listed under this paragraph does not also need to be in compliance with the quantitative criteria for initial listing in the Rule 5500 series.

(A) Market Value of Listed Securities of $75 million (current publicly traded Companies must meet this requirement and the $4 bid price requirement for 90 consecutive trading days prior to applying for listing if qualifying to list only under the Market Value Standard);

(B) Market Value of Publicly Held Shares of at least $20 million; and

(C) At least four registered and active Market Makers.

(4) Total Assets/Total Revenue Standard

A Company listed under this paragraph does not also need to be in compliance with the quantitative criteria for initial listing in the Rule 5500 series.

(A) Total assets and total revenue of $75 million each for the most recently completed fiscal year or two of the three most recently completed fiscal years;

(B) Market Value of Publicly Held Shares of at least $20 million; and

(C) At least four registered and active Market Makers.

Adopted March 12, 2009 (SR-NASDAQ-2009-018); amended by SR-NASDAQ-2009-040 eff. April 27, 2009.

 

5410. Initial Listing Requirements for Rights and Warrants

For initial listing, the rights or warrants must meet all the requirements below:

(a) At least 450,000 rights or warrants issued;

(b) The underlying security must be listed on the Global Market or be a Covered Security;

(c) There must be at least three registered and active Market Makers; and

(d) In the case of warrants, there must be at least 400 Round Lot Holders (except that this requirement will not apply to the listing of warrants in connection with the initial firm commitment underwritten public offering of such warrants).

Adopted Mar. 12, 2009 (SR-NASDAQ-2009-018); amended Feb. 19, 2010 (SR-NASDAQ-2010-024).

 

5415. Initial Listing Requirements for Preferred Stock and Secondary Classes of Common Stock

(a) When the Primary Equity Security of the Company is listed on the Global Market or is a Covered Security, the preferred stock or secondary class of common stock must meet all of the requirements set forth in (1) through (5) below.

(1) At least 200,000 Publicly Held Shares;

(2) A Market Value of Publicly Held Shares of at least $4,000,000;

(3) Minimum bid price of at least $4 per share;

(4) At least 100 Round Lot Holders; and

(5) At least three registered and active Market Makers .

(b) When the Company’s Primary Equity Security is not listed on the Global Market or is not a Covered Security, the preferred stock and/or secondary class of common stock may be listed on the Global Market so long as it satisfies the initial listing criteria for Primary Equity Securities set forth in Rule 5405.

Adopted March 12, 2009 (SR-NASDAQ-2009-018); amended August 18, 2009 (SR-NASDAQ-2009-078).

 

5450. Continued Listing Requirements and Standards for Primary Equity Securities

A Company that has its Primary Equity Security listed on the Global Market must continue to substantially meet all of the requirements set forth in Rule 5450(a) and at least one of the Standards in Rule 5450(b). Failure to meet any of the continued listing requirements will be processed in accordance with the provisions set forth in the Rule 5800 Series. A security maintaining its listing under 5450(b)(3) need not also be in compliance with the quantitative maintenance criteria in the Rule 5500 series.

(a) Continued Listing Requirements for Primary Equity Securities:

(1) Minimum bid price of $1 per share; and

(2) At least 400 Total Holders.

(b) Continued Listing Standards for Primary Equity Securities:

(1) Equity Standard

(A) Stockholders’ equity of at least $10 million;

(B) At least 750,000 Publicly Held Shares;

(C) Market Value of Publicly Held Shares of at least $5 million; and

(D) At least two registered and active Market Makers.

(2) Market Value Standard

(A) Market Value of Listed Securities of at least $50 million;

(B) At least 1,100,000 Publicly Held Shares;

(C) Market Value of Publicly Held Shares of at least $15 million; and

(D) At least four registered and active Market Makers.

(3) Total Assets/Total Revenue Standard

(A) Total assets and total revenue of at least $50 million each for the most recently completed fiscal year or two of the three most recently completed fiscal years;

(B) At least 1,100,000 Publicly Held Shares;

(C) Market Value of Publicly Held Shares of at least $15 million; and

(D) At least four registered and active Market Makers.

Adopted March 12, 2009 (SR-NASDAQ-2009-018).

 

5455. Continued Listing Requirements for Rights and Warrants

For continued listing, the rights or warrants must meet all the requirements below:

(a) The underlying security must continue to be listed on the Global Market or be a Covered Security; and

(b) There must be at least two registered and active Market Makers, one of which may be a Market Maker entering a stabilizing bid.

Adopted March 12, 2009 (SR-NASDAQ-2009-018).

 

5460. Continued Listing Requirements for Preferred Stock and Secondary Classes of Common Stock

(a) When the Company’s Primary Equity Security of the Company is listed on the Global Market or is a Covered Security, the preferred stock or secondary class of common stock must meet all of the requirements set forth in (1) through (5) below.

(1) At least 100,000 Publicly Held Shares;

(2) A Market Value of Publicly Held Shares of at least $1,000,000;

(3) Minimum bid price of at least $1 per share;

(4) At least 100 Public Holders; and

(5) At least two registered and active Market Makers.

(b) When the Primary Equity Security of the Company is not listed on the Global Market or is not a Covered Security, the preferred stock and/or secondary class of common stock may continue to be listed on the Global Market so long as it satisfies the continued listing criteria for Primary Equity Securities set forth in Rule 5450.

Adopted March 12, 2009 (SR-NASDAQ-2009-018); amended August 18, 2009 (SR-NASDAQ-2009-078)