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In
corporate finance Corporate finance is the area of finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers a ...
, a listing refers to the company's
shares In financial markets A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known ...
being on the list (or board) of
stock In finance, stock (also capital stock) consists of all of the shares In financial markets A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities i ...

stock
that are officially traded on a
stock exchange A stock exchange, securities exchange, or bourse is an exchange Exchange may refer to: Places United States * Exchange, Indiana Exchange is an Unincorporated area, unincorporated community in Green Township, Morgan County, Indiana, Green To ...
. Some stock exchanges allow shares of a foreign company to be listed and may allow
dual listing A dual-listed company or DLC is a corporate structure in which two corporations A corporation is an organization—usually a group of people or a company A company, abbreviated as co., is a Legal personality, legal entity representing an ...
, subject to conditions. Normally the issuing company is the one that applies for a listing but in some countries an 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 a
merger In corporate finance Corporate finance is the area of finance that deals with sources of funding, the capital structure of corporations, the actions that managers take to increase the Value investing, value of the firm to the shareholders, ...
or
takeover In business, a takeover is the purchase of one company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of both, ...
, or the company going private.


Requirements

Each stock exchange has its own listing requirements or rules. Initial listing requirements usually include supplying a history of a few years of
financial statement Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...
s (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: the
New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange A stock exchange, securities exchange, or bourse is an exchange Exchange may refer to: Places United States * Exchange, Indiana Exchange is an U ...

New 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:
NASDAQ The Nasdaq Stock Market () is an American stock exchange A stock exchange, securities exchange, or bourse is an exchange Exchange may refer to: Places United States * Exchange, Indiana Exchange is an Unincorporated area, unincorpora ...
requires 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 the
London Stock Exchange London Stock Exchange (LSE) is a stock exchange A stock exchange, securities exchange, or bourse is an exchange Exchange may refer to: Places United States * Exchange, Indiana Exchange is an Unincorporated area, unincorporated community ...
requires a minimum market capitalization (£700,000), three years of audited financial statements, minimum public float (25%) and sufficient
working capital Working capital (abbreviated WC) is a financial metric which represents available to a business, organization, or other entity, including governmental entities. Along with fixed assets such as plant and equipment, working capital is considered a ...
for at least 12 months from the date of listing. * Bombay Stock Exchange:
Bombay Stock Exchange BSE Limited, formerly known as the Bombay Stock Exchange is an Indian stock exchange located on Dalal Street in Mumbai. Established in 1875, it is Asia's oldest stock exchange. The BSE is the world's 7th largest stock exchange with an overall ma ...

Bombay Stock Exchange
(BSE) requires a minimum market capitalization of and minimum public float equivalent to .


Delisting

Delisting refers to the practice of removing the
stock In finance, stock (also capital stock) consists of all of the shares In financial markets A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities i ...

stock
of a company from a
stock exchange A stock exchange, securities exchange, or bourse is an exchange Exchange may refer to: Places United States * Exchange, Indiana Exchange is an Unincorporated area, unincorporated community in Green Township, Morgan County, Indiana, Green To ...
so that investors can no longer trade shares of the stock on that exchange. This typically occurs when a company goes out of business, declares
bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditor A creditor or lender is a party 300px, '' Hip, Hip, Hurrah!'' (1888) by Peder Severin Krøyer, a painting portraying an artists' par ...

bankruptcy
, no longer satisfies the listing rules of the stock exchange, has become a
private company A privately held company or private company is a company which does not offer or trade its company stock (share (finance), shares) to the general public on the stock market exchanges, but rather the company's stock is offered, owned and traded or ...
, has become a subsidiary after a merger 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.Allianz to delist from NYSE and European Exchanges
/ref> In the United States, securities which have been delisted from a major exchange for reasons other than going private or liquidating may be traded on
over-the-counter Over-the-counter (OTC) drugs are medicine Medicine is the Art (skill), art, science, and Praxis (process) , practice of caring for a patient and managing the diagnosis, prognosis, Preventive medicine, prevention, therapy, treatment or Palliat ...
markets like the
OTC Bulletin BoardThe OTC (Over-The-Counter) Bulletin Board or OTCBB is a United States Financial quote, quotation medium operated by the Financial Industry Regulatory Authority (FINRA) for its subscribing members. The board was used for many over-the-counter (finan ...
or the Pink Sheets.


References


External links


Nasdaq listing standards and fees
{{stock market Securities (finance) Stock market