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What is Listing Requirements?

The term “Listing Requirements” refers to the specific conditions that a stock exchange [1] will demand [2] from companies that wish to become listed on that exchange. These conditions could include such things as a minimum amount of outstanding shares, minimum level of market capitalization [3], or even minimum annual income [4]. However, the requirements may vary according to the different stock exchanges [1] located throughout the world.

For example, in order to be listed on the New York Stock Exchange [5] (NYSE [5]), the requirement is that a company needs to have issued a minimum of one million shares of stock with a worth of $100 million. The company must also have earned in excess of $10 million during the course of the past three years.

A company that wants to be listed on the NASDAQ [6] Stock Exchange will find similar requirements with slightly different figures. NASDAQ requires that a company has issued at least 1.25 million shares of stock with a worth of at least $70 million. The NASDAQ does want a higher level of earnings over the past three years than the NYSE, requiring more than $11 million.

Looking overseas, the Bombay Stock Exchange (BSE) also has specific requirements for companies who wish to list there. The BSE wants to see a minimum market capitalization of 250 Million rupees, as well as a minimum public float [7] equivalent to 100 Million rupees.

For the London Stock Exchange, the main market institutes a comparatively comprehensive set of requirements. These include a minimum amount of market capitalization (£700,000), three years of audited financial statements, a minimum public float (25 per cent) and sufficient working capital [8] to cover 12 months from the listing date.