Laura Anthony

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    • Member Type(s): Expert
    • Title:Founding Partner
    • Organization:Legal & Compliance, LLC
    • Area of Expertise:Securities Law
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NASDAQ Initial Quantitative And Qualitative Requirements
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Uploaded By: Laura Anthony, Esq.
Date Added: May 8, 2017
Description: NASDAQ Initial Quantitative And Qualitative Requirements- To list its securities on NASDAQ, a company is required to meet: (a) certain initial quantitative and qualitative requirements and (b) certain continuing quantitative and qualitative requirements. The quantitative listing thresholds for initial listing are generally higher than for continued listing, thus helping to ensure that companies have reached a sufficient level of maturity prior to listing. NASDAQ also requires listed companies to meet stringent corporate governance standards. Prior to submitting a full listing application, a company can seek a preliminary listing eligibility review. The Listing Qualifications staff will review the company's public filings to determine if it satisfies the numerical listing requirements. The staff will also consider compliance with the corporate governance requirements of the Marketplace Rules. Once the preliminary review is completed, the Listing Qualifications staff will determine whether the company satisfies the numerical listing criteria and whether any corporate governance or regulatory issues raised by the company would preclude listing approval. Any final approval, however, will require the company to submit a formal listing application, which application will undergo an extensive review by NASDAQ Listing Qualifications staff. Moreover, any final approval will require satisfactory compliance with certain other qualitative reviews, including a review of the regulatory history of the company's officers, directors and significant shareholders. For the NASDAQ Capital Market there are three financial and liquidity standards of qualification. These are the Equity standard, Market value of listed securities standard and Net income standard. All three standards require the company to have a minimum of 300 shareholders owning at least one hundred shares each and a minimum of 1,000,000 shares in the public float. Generally all three standards require a stock price of $4.00 over a 90 day period, however there are exceptions that allow for either a $3.00 or even $2.00 price based on revenues, assets and operating history. All three standards require a minimum value of stockholder’s equity. The equity standard requires $5 million in equity with two years operating history; while both the market value and net income standard only require $4 million in stockholder’s equity and no particular operating history, though the net income standard does require $750,000 in net income for the last fiscal year or two of the last 3 most recent years. All three standards require a minimum market value of the public float. For the equity and market value standard it is $15 million and for the net income standard it is $5 million. The market value of listed securities standard requires a $50 million market value while the other two standards do not require any particular market value. Satisfaction of the equity standard is the most common for applicants. For a complete chart of the listing requirement see Securities-Law-Blog.com.
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