• Issuers
• Consultation Services

NASDAQ Listing Requirements

---

The National Association of Securities Dealers Automated Quotations (NASDAQ) is a national securities exchange that ranks second in market capitalization to the NYSE, and maintains its own listing requirements for each of its tiers. The NASDAQ, as an organization, was founded in 1971 and gained recognition from the SEC in 2006. With its constituent companies having a combined market capitalization of over $8.5 trillion, NASDAQ is the preferred marketplace for technology and bio-technology stocks. The exchange is well known for the high-volatility trading that takes place in its electronic marketplace. NASDAQ’s normal trading hours are between 9:30am and 4:00pm Eastern time, with a pre-market session from 4:00 am to 9:30 am and post-market session from 4:00 pm to 8:00 pm Eastern time.

NASDAQ is segregated into three distinct tiers with each having their own listing requirements:

Listing Requirements

Companies that want to list their securities on NASDAQ must meet certain requirements including both quantitative and qualitative requirements, with additional requirements that must be met throughout the duration of the security's listing. Companies must also adhere to corporate governance standards.

Before a company files a complete application, they have the option to undergo a preliminary listing eligibility review. The Listing Qualifications staff will attempt to determine whether a company has met the numerical listing criteria through reviewing public filings, and if the company has any reason for regulatory concerns. A preliminary listing eligibility review is not the same as filing a formal application.

NASDAQ Global Select Market

Companies must meet all of the criteria under at least one of four different financial standards:

Financial Requirements	Standard 1: Earnings	Standard 2: Capitalization with Cash Flow	Standard 3: Capitalization with Revenue	Standard 4: Assets with Equity
Listing Rules	5315(e) and 5315(f)(3)(A)	5315(e) and 5315(f)(3)(B)	5315(e) and 5315(f)(3)(C)	5315(e) and 5315(f)(3)(D)
Pre-Tax Earnings	Aggregate in prior three fiscal years above or equal to $11mm, and each of the prior three fiscal years above or equal to $0, and each of the two most recent fiscal years above or equal to $2.2mm	-	-	-
Cash Flows	-	Aggregate in prior three fiscal years above or equal to $27mm, and each of the prior three fiscal years above or equal to $0	-	-
Market Cap	-	Average above or equal to $550mm over prior 12 months	Average above or equal to $850mm over prior 12 months	$160mm
Revenue	-	Previous fiscal year above or equal to $110mm	Previous fiscal year above or equal to $90mm	-
Total Assets	-	-	-	$80mm
Stockholders’ Equity	-	-	-	$55mm
Bid Price	$4	$4	$4	$4

Companies trying to qualify for the NASDAQ Global Select Market’s initial listing standards must also meet these liquidity requirements:

Liquidity Requirements	Initial Public Offerings and Spin-Off Companies	Seasoned Companies: Currently Trading Common Stock or Equivalents	Affiliated Companies	Listing Rule
Round lot shareholders or Total shareholders or Total shareholders and average monthly trading volume over past twelve months	450 or 2,200	450 or 2,200 or 550 and 1.1mm	450 or 2,200 or 550 and 1.1mm	5315(f)(1)
Publicly Held Shares	1,250,000	1,250,000	1,250,000	5315(e)(2)
Market value of publicly held shares or Market value of publicly held shares and stockholders’ equity	$45mm	$110mm or $100mm and $110mm	$45mm	5315(f)(2)

NASDAQ Global Markets

Companies must meet all of the criteria of at least one of four standards listed below.

Requirement	Income Standard	Equity Standard	Market Value Standard	Total Assets/ Total Revenue Standard
Listing Rules	5405(a) and 5405(b)(1)	5405(a) and 5405(b)(2)	5405(a) and 5405(b)(3)	5405(a) and 5405(b)(4)
Income from continuing operations before income taxes (in latest fiscal year or in two of last three fiscal years)	$1mm	-	-	-
Stockholders’ Equity	$15mm	$30mm	-	-
Market Value of Listed Securities	-	-	$75mm	-
Total Assets and Total Revenue (in latest fiscal year or in two of last three fiscal years)	-	-	-	$75mm and $75mm
Publicly Held Shares	1.1mm	1.1mm	1.1mm	1.1mm
Market Value of Publicly Held Shares	$8mm	$18mm	$20mm	$20mm
Bid Price	$4	$4	$4	$4
Shareholders (round lot holders)	400	400	400	400
Market Makers	3	3	4	4
Operating History	-	2 years	-	-

NASDAQ Capital Market

Companies must meet all of the criteria of at least one of three standards listed below.

Requirements	Equity Standard	Market Value of Listed Securities Standard	Net Income Standard
Listing Rules	5505(a) and 5505(b)(1)	5505(a) and 5505(b)(2)	5505(a) and 5505(b)(3)
Stockholders’ Equity	$5mm	$4mm	$4mm
Market Value of Publicly Held Shares	$15mm	$15mm	$5mm
Operating History	2 years	-	-
Market Value of Listed Securities	-	$50mm	-
Net Income from Continuing Operations (in the latest fiscal year or in two of the last three fiscal years)	-	-	$750K
Publicly Held Shares	1mm	1mm	1mm
Shareholders (round lot holders)	300	300	300
Market Makers	3	3	3
Bid Price OR Closing Price	$4 $3	$4 $2	$4 $3

Listing Fees

Depending on which market your company is attempting to qualify for, and what type of security your company is planning on issuing, there will be different listing fees.

Market entry fees, based on the total number of shares outstanding at the time of initial listing, includes a non-refundable application fee. Entry fees are due before the first day of trading.

Entry fees for the three different tiers are listed below:

NASDAQ Global Select Market and NASDAQ Global Market

Total Shares Outstanding	Entry Fee
Up to 30mm	$125K, including $25K application fee
30+ to 50mm	$150K, including $25K application fee
50+ to 100mm	$200K, including $25K application fee
Over 100mm	$225K, including $25K application fee

NASDAQ Capital Market

Total Shares Outstanding	Entry Fee
Up to 15mm	$50K, including $5K application fee
Over 15mm	$75K, including $5K application fee

For the full NASDAQ listing requirements, see the NASDAQ Initial Listing Guide.

Corporate Governance

The three tiers of the NASDAQ stock market all have similar rigorous standards regarding corporate governance. Companies are subject to the following corporate governance standards and categories:

Seasoning Rules

NASDAQ adopted ?seasoning rules? in 2011, which restrict companies who have completed reverse mergers with a public shell from submitting an application until 1) the company has traded on an over-the-counter market, another national securities exchange, or a regulated foreign exchange or 2) one year has passed since all required information from the merger has been filed. Companies must also file all required reports for the merger, including an annual report.

For at least 30 days prior to filing the application, the reverse merger company must also keep their closing price stock equal to the initial listing standard that applied to the company?s stock price. An exception exists for to companies that complete a firm commitment that has net proceeds of at least $40 million.

The SEC also maintains the right to impose more requirements on a company if they believe it is warranted.

Application Requirements

Depending on a company?s circumstances, there are 12 different NASDAQ listing applications, designed to cover situations where there has been a change of control, a company has completed an IPO, etc.

All applications are approximately 7 pages in length and require companies to submit basic information, in addition to information about the specific security. Companies must also disclose any investigations or lawsuits within the 10 years prior to the application that involve the company.

The formal NASDAQ application package requires a company to submit a:

Companies who wish to get listed on any of the the NASDAQ market tiers can submit an application. Getting listed on a NASDAQ market tier is a four step process, which includes:

Submitted applications typically take 4-6 weeks to process.

Get Started with your NASDAQ Listing

If you would like help you getting started on your NASDAQ listing, please complete this form below.

Benefits

Trading on a national exchange helps companies attract investors, have higher trading volume and increased liquidity. Broker-dealers are more easily able to participate in the IPO and subsequent trading, because while they are not typically able to recommend penny stocks to their clients, exchange listed stocks are not subject to the penny stock definition.

Colonial Stock Transfer can help provide SEC registered transfer agent services for your IPO as well as help you with your NASDAQ application. To speak with a professional today or learn more, please contact us.