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DictionarySeestock exchangelisting requirements
Listing requirementsRequirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading.Listing RequirementRules to which a publicly-traded company must adhere in order to qualify for trading on a stock exchange. Each exchange has its own rules, but they usually pertain to having a certain market capitalization, number of shareholders, and/or revenue. Listing requirements exist to enforce as much stability on an exchange as possible. A previously listed company may be delisted if it falls below the listing requirements for too long, especially if it shows no sign of recovery.listing requirements Requirements that are made of a firm and the firm's security before the security can be listed for trading on an exchange. Each exchange has its own listing requirements, covering things such as the minimum shares outstanding, the number of shareholders, and the earnings history.Case Study The New York Stock Exchange imposes distribution and quantitative criteria that companies must meet in order to list stocks on the Big Board. The exchange also states that it maintains broad discretion regarding a firm's listing and may deny listings or apply additional or more stringent criteria as circumstances warrant. Below are domestic standards for listing securities on the New York Stock Exchange (separate standards apply to affiliated companies and non-U.S. companies). Minimum Distribution Criteria- 2,000 round-lot (generally, 100 shares) shareholders, or
- 2,200 total shareholders together with 100,000-share average monthly trading volume during the most recent 6 months, or
- 500 total shareholders together with one-million-share average monthly trading volume during the most recent 12 months.
- One million public shares.
- $100 million market value of public shares for a public company, or
- $60 million market value for a spinoff, carve-out, or IPO.
Minimum Quantitative Standards- Aggregate pretax earnings the last three years of $6.5 million achieved as $2.5 million in the most recent year and $2 million in each of the two preceding years, or
- Pretax earnings of $4.5 million in the most recent year, although each of the last three years must be profitable, or
- $25 million of aggregate operating cash flow for the last three years (each year must report a positive amount) for companies with over $500 million in global market capitalization and over $100 million in revenues of the last 12 months, or
- $100 million in revenues during the last fiscal year and average global market capitalization of $1 million.
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