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Listing Requirements To Trade On The Nyse, Nasdaq, And The Amex

By: Jason Bacot

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There are many regional and national markets where the buying and selling of securities take place. The three major markets in the U.S. are the New York Stock Exchange or NYSE, the NASDAQ or National Market, and the American Stock Exchange or AMEX. If you want your company shares to be bought and sold in these three major markets, your company must be able to fulfill their listing requirements listed below:

New York Stock Exchange (NYSE)

The NYSE enforces minimum quantitative standards based on two important criteria: financial criteria and distribution and size criteria.

Financial Criteria: A company must have a pretax income of $4.5 million in the previous year or $6.5 million over the last three years, $25 million operating cash flow collective over the last three years, or $250 million revenue for the previous year. The NYSE may also consider other factors since it has a broad discretion regarding the company listing.
Distribution and Size Criteria: A company must have a certain number of shareholders, $60 million IPO market value, or $100 million market value of public shares.

NASDAQ National Market (NASDAQ)

The NASDAQ imposes quantitative standards such as minimum bidding price and other criteria in allowing a company to list its stocks on the NASDAQ.

Quantitative Requirements: To list stocks on the NASDAQ, the company's net tangible assets must be worth $6 million and its net income in the most recent fiscal year or two of the last three fiscal years must be worth $1 million. Moreover, the company must have a public float worth $1.1 million with a market value of $8 million, at least 400 shareholders, and a minimum of three market makers.

Minimum Initial Bidding price: The minimum initial bidding price must be set to $5.00, and must remain later at or higher than $1.00. This should serve as protection against some market activities that involve low-priced securities. It should also protect the credibility of the NASDAQ National Market.

Peer Review Requirement: All independent auditors of companies listed on the NASDAQ must be monitored under the market's peer review system. Peers also review the quality of the accounting firms of all companies listed on the NASDAQ every three years.

Capitalization Alternative: If a company does not meet the NASDAQ's quantitative requirements, it may still be listed on the NASDAQ if its market capitalization is worth $75 million, total assets are worth $75 million, total revenues are worth $75 million, and its minimum initial bidding price is $5.00.

NASDAQ Listing Requirements for SmallCap Market

Companies with small capital can be listed under the NASDAQ SmallCap Market only if they meet the following requirements: 1) $4 million worth of net tangible assets, or 2) market capitalization of $50 million, or 3) $750,000 net income in the most recent fiscal year or two of the last three fiscal years.

Moreover, the public float of these companies must be worth $1 million with a market value of $5 million, at least 300 shareholders, and minimum of three market makers. The companies must have been operating for at least one year with $4.00 as its initial minimum bidding price. The same peer review requirements and ongoing bidding price as stated above apply.

American Stock Exchange (AMEX)

The AMEX enforces companies to meet its regular financial and alternate financial guidelines.
Regular Financial Guidelines: The AMEX requires companies to have a pretax income of $750,000 for the latest fiscal year or two of the last three fiscal years, a public float with market value of $3 million, $3 as minimum initial bidding price, and $4 million worth of stockholder's equity.

Alternate Financial Guidelines: Companies may also be listed under the AMEX if they have a public float with market value of $15 million, $3 as minimum initial bidding price, and $4 million worth of stockholder's equity. Under this guideline, the company must have been operating for at least three years.

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