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AMEX and NASDAQ Requirements
Listing requirements for the AMEX or NASDAQ Small Cap Market are much simpler and lighter than that of the NYSE. We know that you want to know why a higher percentage of OTCBB companies went to the NYSE over the NASDAQ if the NYSE has more inflexible entry requirements. The OTCBB stocks that went to the NYSE in the timeframe that I examined were bank related stocks. These were not startups or small business, they were banks. All right, we have talked quite enough about that. Let's pay attention to the NYSE listing requirements. For an initial listing on the NYSE, companies must have somewhere from five hundred to two thousand total stockholders with at least one million one hundred thousand shares being publicly held. The corporation is required to have an average monthly trading volume of one hundred thousand shares for the most recent six months previous to listing. The corporation must have an aggregate market value of anywhere from $60 million to $100 million for shares that are traded publicly. Pre-tax earnings from continuing operations after adjustments for a variety of items must total at least $10 million in the aggregate for the last three fiscal years together with a smallest amount of $2 million in each of the two most recent fiscal years and positive amounts in all three years. There are other evaluation tests where the corporation can qualify for a listing if it has a global market cap of $500 million, $100 million in revenue for the most recent twelve months, and $25 million in aggregate cash flow for the last three fiscal years with positive quantities in each year. The charges for listing on the NYSE are based on the total number of shares to be listed and are comparable to that of the AMEX and NASDAQ.
Those standards are quite hard-hitting when compared to the listing standards of the OTCBB. We ask ourselves what are the listing standards for the OTCBB are, that thought must have crossed our minds, we shall analyze this point of view. According to the OTCBB, they are not a market or an exchange. The OCTBB is basically a quotation service for NASD market makers and, as a result, has no listing requirements. They don’t have any financial requirements and there is no minimum bid price requirement. As a matter of fact, the only requirements for quotation by the OTCBB is that the company must be registered with the Securities and Exchange Commission and be current in its filings with the agency mentioned. When you stop to analyze it, the quotation by the OTCBB appears to be rather simple. But it most definitely is not. I know a small number of CEO's that have waited up to two years for quotation approval by the OTCBB. It is astonishing to think that after the amendments to NASD Rule 6530 went into effect, just about 50% of companies which were quoted on the OTCBB could not meet their listing requirements!