NYSE MKT Listing Requirements
Posted by Securities Attorney Laura Anthony | June 14, 2016 Tags: , ,

This blog is the second in a two-part series explaining the listing requirements for the two small-cap national exchanges, NASDAQ and the NYSE MKT.  The first one, discussing NASDAQ, can be read HERE.

General Information and Background on NYSE MKT

The NYSE MKT is the small- and micro-cap exchange level of the NYSE suite of marketplaces.  The NYSE MKT was formerly the separate American Stock Exchange (AMEX).  In 2008, the NYSE Euronext purchased the AMEX and in 2009 renamed the exchange the NYSE Amex Equities.  In 2012 the exchange was renamed to the current NYSE MKT LLC.  The NASDAQ and NYSE MKT are ultimately business operations vying for attention and competing to attract the best publicly traded companies and investor following.  The NYSE MKT homepage touts the benefits of choosing this exchange over others, including “access to dedicated funding, advocacy, content and networking and the industry’s first small-cap services package.”

Although there are substantial similarities among the different exchanges, and each is governed by the same overall SEC rules and regulations, each exchange also has its own unique differences.  Moreover, each exchange has its own sets of rules and regulations that listing companies must comply with in order to obtain and maintain its listing qualification.

Like all exchanges, and the OTCQX tier of the OTC Markets, the NYSE MKT offers investor relations, broker-dealer networking and marketing services to its listed companies.  The NYSE MKT’s distinctive formula is the Designated Market Maker (DMM) model (formerly referred to as a Specialist).  A DMM is assigned to each security and uses both manual and electronic metrics and algorithms to help stabilize market price and trading volume.

NASDAQ does not have internal DMM’s (or Specialists), but rather relies on market makers in general to increase volume and liquidity in NASDAQ traded securities and hopefully decrease volatility.  Whereas the NYSE MKT relies on both manual (human) and electronic trading oversight, the NASDAQ is purely electronic.  The NYSE MKT has an auction model run by the DMM’s.  The DMM reports all bids and asks into the marketplace, quoting the National Best Bid and Offer (NBBO) a required minimum percentage of time, and sets the opening price of its assigned securities each day.  The opening price may be different than the prior day’s closing price due to after-market trading or any other factor that affects supply and demand.

In other words, the DMM is an intermediary between the broker/dealer/market participants and the execution of trades themselves.  It is thought that using a DMM will increase trading liquidity and volume, because the DMM is motivated to match buyers and sellers and fulfill trading requests by either using its own inventory of the security or finding broker-dealers with matching orders.  A DMM may even solicit a broker-dealer to act as the counterparty to a requested trade.

NASDAQ does not have the auction or DMM model.  Rather, NASDAQ relies on market makers.  Market makers must quote both a firm bid price and firm ask price they are willing to honor.  Each NASDAQ security has multiple market makers (generally at least 14) competing for trades, and helping to ensure that the bid-ask spread is low and that supply and demand results in the best execution prices.

Initial and Continuing Listing Standards

A company seeking to list securities on NYSE MKT must meet minimum listing requirements, including specified financial, liquidity and corporate governance criteria. NYSE MKT has broad discretion over the listing process and may deny an application, even if the technical requirements are met, if it believes such denial is necessary to protect investors and the public interest.  Factors the NYSE MKT consider include, but are not limited to, the nature of a company’s business; the market for its products; its regulatory history; its past corporate governance activities; the reputation of its management; its historical record and pattern of growth; its financial integrity (including filing for bankruptcy); its demonstrated earning power and its future outlook.

Once listed, a company must meet continued listing standards.   In order to apply for listing on NYSE MKT, a company must complete and submit a listing application including specified documents and information.  The quantitative and qualitative standards for initial listing of U.S. companies on NYSE MKT (the “Exchange”) are summarized below.

Read More 

Click Here To Download Whitepaper- NYSE MKT Listing Requirements

The Author

Laura Anthony, Esq.
Founding Partner
Legal & Compliance, LLC
Corporate, Securities and Going Public Attorneys
LAnthony@LegalAndCompliance.com

Securities attorney Laura Anthony and her experienced legal team provides ongoing corporate counsel to small and mid-size private companies, OTC and exchange traded issuers as well as private companies going public on the NASDAQ, NYSE MKT or over-the-counter market, such as the OTCQB and OTCQX. For nearly two decades Legal & Compliance, LLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions as well as registration statements on Forms S-1, S-8 and S-4; compliance with the reporting requirements of the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; Regulation A/A+ offerings; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers, ; applications to and compliance with the corporate governance requirements of securities exchanges including NASDAQ and NYSE MKT; crowdfunding; corporate; and general contract and business transactions. Moreover, Ms. Anthony and her firm represents both target and acquiring companies in reverse mergers and forward mergers, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. Ms. Anthony’s legal team prepares the necessary documentation and assists in completing the requirements of federal and state securities laws and SROs such as FINRA and DTC for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the OTC Market’s top source for industry news, and the producer and host of LawCast.com, the securities law network. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Las Vegas, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.

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