Listing (finance)

Incorporate finance,alistingrefers to the company'ssharesbeing on the list (or board) ofstockthat are publicly listed. Some stock exchanges allow shares of a foreign company to be listed and may allowdual listing,subject to conditions.

Normally the issuing company is the one that applies for a listing but in some countriesan exchange can list a company, for instance because its stock is already being traded via informal channels.

Stocks whose market value and/or turnover fall below critical levels may be delisted by the exchange. Delisting often arises from amergerortakeover,or the company going private.

Requirements

Each stock exchange has its ownlisting requirementsorrules.Initial listing requirements usually include supplying a history of a few years offinancial statements(not required for "alternative" markets targeting young firms); a sufficient size of the amount being placed among the general public (the free float), both in absolute terms and as a percentage of the total outstanding stock; an approved prospectus, usually including opinions from independent assessors, and so on.

Examples

The listing requirements imposed by some stock exchanges include:

• New York Stock Exchange:theNew York Stock Exchange(NYSE) requires a company to have issued at least a million shares of stock worth $100 million and must have earned more than $10 million over the last three years.
• NASDAQ Stock Exchange:NASDAQrequires a company to have issued at least 1.25 million shares of stock worth at least $70 million and must have earned more than $11 million over the last three years.
• London Stock Exchange:the main market of theLondon Stock Exchangerequires a minimum market capitalization (£700,000), three years of audited financial statements, minimum public float (25%) and sufficientworking capitalfor at least 12 months from the date of listing.
• Bombay Stock Exchange:Bombay Stock Exchange(BSE) requires a minimum market capitalization of₹250 million(US$2.9 million) and minimum public float equivalent to₹100 million(US$1.2 million).

Delisting

Delistingrefers to the practice of removing thecapital stockof a company from astock exchangeso that investors can no longer trade shares of the stock on that exchange. This typically occurs when a companygoes out of business,declaresbankruptcy,no longer satisfies the listing rules of the stock exchange, has become aprivate company,has become a subsidiary after amerger or acquisition,or wants to reduce regulatory reporting complexities and overhead, or if the stock volumes on the exchange from which it wishes to delist are not significant. Delisting does not necessarily mean a change in company's core strategy.

In the United States, securities which have been delisted from a major exchange for reasons other than going private or liquidating may be traded onover-the-countermarkets like theOTC Bulletin Boardor thePink Sheets.

External links

• Nasdaq listing standards and fees