Stock Exchanges

Stock Exchanges

1. Any publicly held company should strive to have its shares listed on a stock exchange, since doing so makes it much more likely that there will be regular trading in its stock

   • Stock exchange is a physical location ot an electric system, on which investors buy and sell securities
     • Creates an orderly market, which makes it easier for transactions to be completed
       • Trading volume
       • Price volatility
       • Acquisition currency
       • Prestige
       • Reduced bid-ask price spread

2. The steps for doing so vary somewhat by exchange, but generally follow these steps

   • Alter bylaws
   • File application
   • Investigation
   • Reserve ticket symbol
   • Set trading date
   • Begin trading

3. The stock exchange that has the most prestige and sets the most difficult listing standard is the New York Stock Exchange

   • It takes time to build sufficient mass to justify being on this exchange
     • The NYSE purchased the American Stock Exchange and now calls this exchange the NYSE MKT
       • This exchange is designed for much smaller companies than those found on the NYSE

4. The NASDAQ is a cpmputerized system that provides price quotations and facilitates the purchase and sale of securities

   • The global select market has the most rigorous standards. because its designed to compete with the NYSE
     • The NASDAQ global market has listing standards that sandwich it between the NASDAQ global select market and the NASDAQ capital market
       • The NASDAQ capital market imposes the easiest listing standards which makes it a direct competitor to the NYSE MKT

5. The major stock exchanges described in the preceding sections are by no means the only ones on which a company can list its shares

   • The Toronto Stock Exchange and other exchanges like it, have designed their listing requirements to make it relatively easy for a smaller company to be listed
     • Australian Securities Exchange
     • Deutsche Bourse
     • Hong Kong Stock Exchange
     • London Stock Exchange
     • Shanghai Stock Exchange
     • Tokyo Stock Exchange

6. Ongoing standards may include the maintenance of minimum amounts for a combination of:

   • The number of publicly traded shares
   • Total market value
   • Stock price
   • The number of shareholders
   • A market maker is a broker-dealer that facilitates trading in a security by displaying buy and sell quotations for the issuing company´s shares, for which it may sell from its own inventory

7. The over the counter market is known as the Over the Counter Bulletin Board

   • Its a stock listing service that shows real-time quotes, last-sale price, and volume information for all securities listed on the OTCBB
     • Is not a formal stock exchange, but rather the default designation given to a company that is not listed on a stock exchange but which is current in its filings with the SEC
       • There are no other requirements for being listed on the OTCBB

8. If a company is remiss in its SEC filings or has gone private, its shares will be listed on the Pink Sheets

   • This is essentially the default listing for the securities of a company that doesnt expend any effort to make its financial results known to the public
     • The Pink Sheets are administred by OTC Markets Group, Inc.