corporate finance Corporate finance is an area of finance that deals with the sources of funding, and the capital structure of businesses, the actions that managers take to increase the Value investing, value of the firm to the shareholders, and the tools and analy ...

, a listing refers to the company's

shares In financial markets, a share (sometimes referred to as stock or equity) is a unit of equity ownership in the capital stock of a corporation. It can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Sha ...

being on the list (or board) of

stock Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...

that are publicly listed. Some stock exchanges allow shares of a foreign company to be listed and may allow dual listing, 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 channel Stocks whose market value and/or turnover fall below critical levels may be delisted by the exchange. Delisting often arises from a

merger Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...

or takeover, 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 in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...

(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 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 The London Stock Exchange (LSE) is a stock exchange based in London, England. the total market value of all companies trading on the LSE stood at US$3.42 trillion. Its current premises are situated in Paternoster Square close to St Paul's Cath ...

requires a minimum market capitalization (£700,000), three years of audited financial statements, minimum public float (25%) and sufficient working capital for at least 12 months from the date of listing. * Bombay Stock Exchange: 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 capital stock of a company from a

stock exchange A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for ...

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 creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...

, no longer satisfies the listing rules of the stock exchange, has become a

private company A privately held company (or simply a private company) is a company whose Stock, shares and related rights or obligations are not offered for public subscription or publicly negotiated in their respective listed markets. Instead, the Private equi ...

, 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. 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 markets like the

OTC Bulletin Board The OTC (Over-The-Counter) Bulletin Board or OTCBB was a United States Financial quote, quotation medium operated by the Financial Industry Regulatory Authority (FINRA) for its subscribing members. FINRA closed the OTCBB on November 8, 2021. The ...

or the Pink Sheets.

References

External links

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