Nasdaq OMX, the transatlantic exchange, late on Wednesday became the latest exchange to relax listings standards for some companies by saying it would establish a “new listing market” for companies that currently do not qualify for an exchange listing.
The new platform, to be known simply as BX, would be “a modern venue for companies that aspire to list on, or return to, the Nasdaq stock market”, Nasdaq said.
Nasdaq OMX said: “While BX will have basic quantitative listing standards, the exchange will require companies to comply with many of the qualitative requirements for listing on Nasdaq and other securities exchanges. In addition, transactions on this platform will be subject to a high level of real-time and post-trade market surveillance.”
The move is the latest in a series by exchanges that are tweaking listings standards to try and attract as wide a range of companies as possible amid fierce competition for primary and secondary issuance. In some cases, exchanges are attempting to keep existing listings.
In the US Nasdaq rival NYSE Euronext in June decided to maintain a threshold of $15m as the lowest level that a company’s market value can fall before automatically losing its listing. The previous threshold had been $25m and had been due to revert to that level after an initially temporary move down to $15m.
Moves to offer tiered listings according to company size and the use of different corporate governance standards were pioneered some years ago by OTC Pink Sheets, long known for operating the “Pink Sheets” penny stock quoting venue.
The operator has since launched a “premium” tier above basic penny stock standards known as OTCQX, “which includes both the elite OTCQX market tiers for strong OTC-traded companies that can satisfy financial and disclosure listing standards”, the operator says.
In the UK, the Financial Services Authority last month approved a new more rigorous primary listing category for the London Stock Exchange, which will now be known as a ”premium listing” to make clear that it holds companies to higher corporate governance standards, no matter where they are based.
Bob McCooey, senior vice president of Nasdaq OMX, said: “With BX we are filling a necessary need for a well-regulated listing venue for companies that otherwise would transfer to, or remain on an unregulated or lightly regulated platform.”
“This platform will provide significant benefits and protections to companies and their shareholders alike.”
Companies that qualify for BX will “need to meet significant qualitative listing requirements”, Nasdaq said, including having at least three independent directors, a fully independent audit committee and an independent process for oversight of executive compensation decisions.
“It is expected that candidates for BX are presently trading on one of the over-the-counter venues, either the OTCBB or the ‘Pink Sheets’, or are listed on Nasdaq or another exchange and subject to being delisted,” Nasdaq said.
The exchange operator said it would use its listing licence from the acquisition of The Boston Stock Exchange in September last year to launch the BX market.
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