The Securities and Exchange Commission has approved substantial changes in Nasdaq's listing qualification standards. The new initial listing requirements went into effect in 1997. The continued listing requirements became effective on February 23, 1998. For more information on the new continued listing requirements, click here.
Listing requirements for The Nasdaq SmallCap Market(sm):
Summary of minimum requirements for initial listing, effective March 3, 1997:
Net tangible assets1 of $4 million, or market capitalization of $50 million, or $750,000 in net income for two of the last three years Public float of one million shares2 $5 million market value for the public float 300 shareholders $4 minimum bid price Three market makers Operating history of one year or a market capitalization of $50 million Corporate Governance Standards such as: requiring a minimum of two independent directors on its board of directors; establishing and maintaining an audit committee with a majority of independent directors; holding an annual shareholders meeting; soliciting proxies for all meetings of shareholders; distributing annual and interim reports; utilizing the company's audit committee or a comparable body to review potential conflicts of interest; and requiring shareholder approval for certain actions
1 Net tangible assets are total assets less total liabilities and goodwill.
2 The public float consists of shares that are not held directly or indirectly by any officer or director of the issuer and by any other person who is the beneficial owner of more than 10 percent of the total shares outstanding. Summary of minimum requirements for initial listing, prior to March 3, 1997:
$4 million in total assets $2 million in total stockholders' equity Public float of 100,000 shares $1 million market value for the public float 300 shareholders $3 minimum bid price Two market makers Registration under Section 12(g) of the Securities Exchange Act of 1934 or equivalent (There is a temporary exemption for initial public offerings.)
Summary of minimum requirements for continued listing, effective February 23, 1998:
Net tangible assets1 of $2 million, or market capitalization of $35 million, or $500,000 in net income for two of the last three years Public float of 500,000 shares2 $1 million market value for the public float 300 shareholders $1 minimum bid price3. Two market makers Corporate Governance Standards (see initial listing requirements)
1 Net tangible assets are total assets less total liabilities and goodwill.
2 The public float consists of shares that are not held directly or indirectly by any officer or director of the issuer and by any other person who is the beneficial owner of more than 10 percent of the total shares outstanding.
3 A company is not in compliance with this requirement when its stock drops below $1 for 30 trading days. The company will be notified of delisting proceedings unless the stock closes at $1 or more for 10 consecutive trading days, within 90 calendar days of falling out of compliance. Summary of minimum requirements for continued listing, prior to February 23, 1998:
$2 million in total assets $1 million in total stockholders' equity Public float of 100,000 shares $200,000 market value for the public float 300 shareholders $1 minimum bid price * Two market makers Registration under Section 12(g) of the Securities Exchange Act of 1934 or equivalent
* If the $1 minimum bid price requirement is not met, the issuer will continue to qualify if the value of the public float is at least $1 million and capital and surplus is at least $2 million.
"A deficiency for market value of public float, market makers, and bid price will be determined if the issuer fails any of these requirements for 10 consecutive days. If failure of any of the 10-day test occurs, the issuer will be notified promptly and will be given 30 calendar days to comply with the market maker criteria and 90 days to comply with the bid price or market value of public float requirements." |
