NYSE American Listing Standards
The New York Stock Exchange (NYSE) American is the small- and micro-cap exchange level of the NYSE marketplaces. The NYSE American was formerly the separate American Stock Exchange (AMEX).
How the NYSE American is Different
All national registered exchanges, including Nasdaq and the NYSE/NYSE American, are self-regulatory organizations (SRO’s) with their own rules and regulations. These SROs are governed by the SEC. The NYSE American is the small- and micro-cap exchange level of the NYSE suite of marketplaces.
Like all exchanges, and the OTCQX tier of the OTC Markets, the NYSE American offers investor relations, broker-dealer networking and marketing services to its listed companies. The NYSE American’s distinctive formula is the Designated Market Maker (DMM) model (formerly referred to as a Specialist). A DMM is assigned to each security and uses manual and electronic metrics and algorithms to help stabilize market prices and trading volume.
Nasdaq does not have internal DMMs (or Specialists) but instead relies on market makers, in general, to increase volume and liquidity in Nasdaq-traded securities and hopefully decrease volatility. Whereas the NYSE American relies on manual (human) and electronic trading oversight, the NASDAQ is purely electronic. The NYSE American has an auction model run by the DMMs. The DMM reports all bids and asks into the marketplace, quoting the National Best Bid and Offer (NBBO) a required minimum percentage of the time, and sets the opening price of its assigned securities each day. The opening price may differ from the previous day’s closing price due to after-market trading or any other factor affecting supply and demand.
In other words, the DMM is an intermediary between the broker/dealer/market participants and the execution of trades themselves. It is thought that using a DMM will increase trading liquidity and volume because the DMM is motivated to match buyers and sellers and fulfill trading requests by either using its security inventory or finding broker-dealers with matching orders. A DMM may even solicit a broker-dealer to act as the counterparty to a requested trade.
Nasdaq does not have the auction or DMM model. Instead, Nasdaq relies on market makers. Market makers must quote both a firm bid price and a firm ask price they are willing to honor. Each Nasdaq security has multiple market makers (generally at least 14) competing for trades, helping to ensure that the bid-ask spread is low and that supply and demand result in the best execution prices.
Listing Criteria For NYSE American
A company seeking to list securities on NYSE American must meet minimum listing requirements, including specified financial, liquidity and corporate governance criteria. NYSE American has broad discretion over the listing process and may deny an application, even if the technical requirements are met, if it believes such denial is necessary to protect investors and the public interest. Factors the NYSE American consider include, but are not limited to, the nature of a company’s business; the market for its products; its regulatory history; its past corporate governance activities; the reputation of its management; its historical record and pattern of growth; its financial integrity (including filing for bankruptcy); its demonstrated earning power and its future outlook.
To list its securities on the NYSE American, a company is required to meet: (a) certain initial quantitative and qualitative requirements and (b) certain continuing quantitative and qualitative requirements. Unlike Nasdaq, the NYSE American does not exclude restricted securities from its liquidity standards, including round lot shareholders, market value of publicly held shares or total shares outstanding.
The following chart is copied from the NYSE website.
|Criteria||Standard 1||Standard 2||Standard 3||Standard 4a||Standard 4b|
|Market capitalization||N/A||N/A||$50 million||$75 million
|Total assets and total revenues||N/A||N/A||N/A||N/A||$75 million in total assets
and $75 million in revenues(1)
|Market value of public float(2)||$3 million||$15 million||$15 million||$20 million||$20 million|
|Operating History||N/A||2 years||N/A||N/A||N/A|
|Shareholders’ Equity||$4 million||$4 million||$4 million||N/A||N/A|
|Public shareholders/Public float (shares)(2)||Option 1: 800/500,000
Option 2: 400/1,000,000
Option 3: 400/500,000(3)
|Listing Fee||$5,000 application fee and annual fee of either $50,000 or $75,000 depending on number of shares|
|Total IPO Expense||Approximately $750,000 – Includes legal, accounting, audit, underwriter expense reimbursement, SEC filing fee, road show expenses, EDGAR fees, NYSE listing fee, FINRA filing fee and DTC eligibility. Does not include underwriter commission/discount.|
(1) Required in the latest fiscal year, or two of the three most recent fiscal years.
(2) Public shareholders and public float do not include shareholders or shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated (i.e., 10 percent or greater), affiliated or family holdings.
(3) Option 3 requires a daily trading volume of at least 2,000 shares during the six months prior to listing.
Companies must meet the following corporate governance standards:
|Corporate Governance Requirement||Description|
|Distribution of Annual or Interim Reports||The company must make its annual and interim reports available to shareholders, either by mail or electronically through the company’s website.|
|The Exchange has various requirements regarding a company’s independent directors and audit committee. Although generally the company’s board of directors is required to have a majority of independent directors, there are several exceptions, such as for a controlled company or foreign private issuers.
For a review of the new Nasdaq board diversity rules, see https://securities-law-blog.com/2021/09/07/sec-approves-nasdaq-board-diversity-rule/?hilite=%27nasdaq%27.
For a review of Nasdaq board independence standards, see – https://securities-law-blog.com/2019/12/03/nasdaq-board-independence-standards/?hilite=%27nasdaq%27.
For a review of the NYSE American board independence standards, see – https://securities-law-blog.com/2020/01/14/nyse-american-board-independence-standards/?hilite=%27independence%27%2C%27standards%27
|The company is required to have an audit committee consisting solely of independent directors who also satisfy the requirements of SEC Rule 10A-3 and who can read and understand fundamental financial statements. The audit committee must have at least three members. One member of the audit committee must have experience that results in the individual’s financial sophistication.
For a drill down on Nasdaq audit committee requirements, see – https://securities-law-blog.com/2019/12/17/drill-down-on-nasdaq-audit-committee-requirements/?hilite=%27nasdaq%27.
For a drill down on NYSE American audit committee requirements, see – https://securities-law-blog.com/2021/01/26/audit-committees-nyse-american/?hilite=%27audit%27%2C%27committee%27.
Compensation of Executive Officers
|The company is required to have a compensation committee consisting solely of independent directors and having at least two members. The compensation committee must determine, or recommend to the full board for determination, the compensation of the chief executive officer and all other executive officers. Controlled companies and foreign private issuers are exempt from this requirement.|
Nomination of Directors
|Independent directors must select or recommend nominees for directors. Controlled companies and foreign private issuers are exempt from this requirement.|
Code of Conduct
|The company must adopt a code of conduct applicable to all directors, officers and employees.|
|The company is required to hold an annual meeting of shareholders no later than one year after the end of its fiscal year.
The company is required to solicit proxies for all shareholder meetings.
|The company must provide for a quorum of not less than 33 1/3% of the outstanding shares of it voting stock for any meeting of the holders of its common stock.|
Conflict of Interest
|The company must conduct appropriate review and oversight of all related party transactions for potential conflict of interest situations.|
|Shareholder Approval||The company is required to obtain shareholder approval of certain issuances of securities, including:
· Acquisitions where the issuance equals 20% or more of the pre-transaction outstanding shares, or 5% or more of the pre-transaction outstanding shares whena related party has a 5% or greater interest in the acquisition target (see http://securities-law-blog.com/2019/03/26/the-20-rule-acquisitions/.
· Issuances resulting in a change of control (see http://securities-law-blog.com/2019/04/09/nasdaq-and-nyse-american-shareholder-approval-requirements-change-of-control/.
· Private placements where the issuance equals 20% or more of the pre-transaction outstanding shares at a price less than the greater of book or market value (see http://securities-law-blog.com/2018/12/18/nasdaq-amends-its-20-dilution-shareholder-approval-rule/.
|Corporate actions or issuances cannot disparately reduce or restrict the voting rights of existing shareholders.
For a review of the voting rights rules, see – https://securities-law-blog.com/2019/08/13/nasdaq-and-nyse-mkt-voting-rights-rules/?hilite=%27nasdaq%27.
Entry Fees To American Listing
Entry fees are based upon the aggregate number of shares to be listed at the time of initial listing, regardless of class, with a maximum cap of $75,000. Fees are assessed on the entry date in NYSE American, except for $5,000, representing a nonrefundable application fee. This fee must be submitted with the company’s application.
Number of Shares Original Listing (Initial) Continued Listing (Annual)
Up to 5 million $50,000 $30,000 (minimum)
5 to 10 million $55,000 $30,000
10 to 15 million $60,000 $30,000
15 to 25 million $75,000 $30,000
25 to 50 million $75,000 $30,000
50 to 75 million $75,000 $40,000
More than 75 million $75,000 $45,000 (maximum)
Our Attorneys Are Here To Ensure Your Compliance
It’s crucial for your business entity to meet the minimum NYSE American compliance guidelines when listing it on this exchange. Learn more about how we can help you navigate the complex and bureaucratic nature of this process by speaking with one of our lawyers. Call CALL or complete our online contact form to schedule an initial consultation today.