NASDAQ Listing Counsel
NASDAQ Listing: Requirements, Process, and Ongoing Compliance Obligations
Listing on NASDAQ represents a significant milestone for public companies. Understanding the listing standards, application process, corporate governance requirements, and ongoing compliance obligations is essential for companies considering or pursuing exchange listing.
How NASDAQ Listing Works
NASDAQ operates three listing tiers: the NASDAQ Global Select Market, the NASDAQ Global Market, and the NASDAQ Capital Market. Each tier has different financial and liquidity requirements, but all tiers require compliance with NASDAQ's corporate governance standards. Companies seeking NASDAQ listing must satisfy both the initial listing requirements (which are higher) and maintain compliance with continued listing standards (which are lower but still substantive).
The NASDAQ Capital Market is the most common entry point for emerging companies. It requires minimum shareholders' equity of $5 million (or alternatives based on market value or net income), a minimum bid price of $4.00, at least 300 public shareholders, and specific minimum public float requirements. Corporate governance standards include board independence requirements, audit committee composition, and executive compensation committee requirements.
The Application Process
The NASDAQ listing application process involves submitting a formal application, paying application fees, undergoing review by NASDAQ Listing Qualifications staff, and responding to any information requests. The process typically takes 4-8 weeks and runs concurrent with or following SEC registration statement review. NASDAQ staff review financial qualifications, corporate governance compliance, and the company's ability to meet ongoing listing standards.
Ongoing Compliance and the Role of Counsel
NASDAQ-listed companies face ongoing obligations that go beyond SEC reporting. They must maintain compliance with corporate governance standards, notify NASDAQ of material events, maintain minimum bid price and market value requirements, and respond promptly to any compliance inquiries. Non-compliance triggers a notification and cure period process that, if not resolved, leads to delisting proceedings. Securities counsel advises on maintaining listing compliance, responding to deficiency notices, and navigating delisting proceedings when they occur.
Frequently Asked Questions
What are NASDAQ listing requirements?
NASDAQ has multiple listing tiers (Global Select, Global, Capital) each with specific financial, governance, and liquidity requirements including minimum shareholders' equity, market value, public float, share price, and number of shareholders. Companies must also meet corporate governance standards including independent board composition and audit committee requirements.
How does the NASDAQ listing process work?
Companies apply to NASDAQ by submitting a listing application, meeting financial and governance standards, completing NASDAQ staff review, and having their shares approved for listing. The process typically runs concurrent with or following SEC registration statement effectiveness.
What ongoing obligations does NASDAQ listing create?
NASDAQ-listed companies must maintain compliance with listing standards, corporate governance requirements, timely SEC reporting, minimum bid price requirements, and notification obligations for material events. Non-compliance can result in delisting proceedings.
Questions about your specific situation?
Frederick M. Lehrer is a former SEC Enforcement Attorney with over 30 years of issuer-side securities law experience. All consultations are confidential. Flat-fee engagements.