NASDAQ Unveils Plans For New Listing Standards

by Glen Shapiro, LawAndTax-News.com, New York

20 February 2006

In what is being viewed as an attempt to raise the bar in its competition with the New York Stock Exchange, the NASDAQ Stock Market on Wednesday unveiled plans to create a new market tier for public companies that will have the highest initial listing standards in the world.

According to the exchange, the standards for the new “NASDAQ Global Select Market” will have financial and liquidity requirements that are higher than those of any other market, and will incorporate world-class corporate governance standards.

For the first time in its 35-year history, NASDAQ will offer three market tiers. In addition to the NASDAQ Global Select Market, NASDAQ will offer the NASDAQ Global Market (the new name for the NASDAQ National Market) and the NASDAQ Capital Market (formerly the NASDAQ Small Cap Market).

NASDAQ expects to implement the new tier on July 1, 2006.

"We have created a blue chip market for blue chip companies,” explained Bob Greifeld, NASDAQ President and Chief Executive Officer.

He added:

“NASDAQ’s view is that the best companies globally will migrate to the markets with the best standards. We believe that the best, most intelligent standards come about when markets and companies recognize what is good for investors and initiate improvements from within. NASDAQ invites markets, companies and investors to review our standards, emulate us, or suggest other types of enhancements. In this way we hope to create a reasoned race to the top for markets and companies.”

Under the new structure, it is estimated that approximately 1,650 companies will meet the standards for the Global Market and that 550 companies will qualify for the Capital Market. All three market tiers maintain rigorous listing and corporate governance standards.

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