On May 12, 2011, the NASDAQ OMX Group, Inc. announced SEC approval of its BX Venture Market. This new listing market will provide companies who would not otherwise qualify for a listing on AMEX, NASDAQ or NYSE with the opportunity to list and trade their shares in a well regulated and transparent environment. NASDAQ claims that the BX Venture Market will provide companies already trading in the over-the-counter markets with the chance to demonstrate a greater commitment to their investors/owners, distinguish themselves from other companies, and benefit from trading in a highly visible environment. The BX Venture Market is expected to launch later this year.
Companies that list on the BX Venture Market will likely be smaller companies that nonetheless need to meet significant qualitative listing requirements. Requirements include:
- three independent directors;
- fully independent audit committee;
- independent director oversight of executive compensation;
- review of related party transactions by independent directors;
- shareholder approval of equity compensation;
- annual shareholder meetings; and
- a code of conduct applicable to all directors, officers and employees.
In addition, companies will be required to meet the following quantitative requirements:
- a minimum initial listing price of $0.25 for companies previously listed on a national securities exchange and $1.00 for companies previously quoted in the over-the-counter market;
- 200,000 publicly held shares for initial and continued listing;
- 200 shareholders, at least 100 of which must be round-lot holders for initial listing and 200 shareholders for continued listing;
- $2 million market value of listed securities for initial listing and $1 million for continued listing; and
- two registered and active market makers for initial and continued listing.
Finally, for companies not previously listed on a national securities exchange, initial listing will require that the company evidence either $1 million in stockholders’ equity or $5 million in total assets, one year of operating history, and a plan to maintain sufficient working capital for twelve months after listing.
For more information, please visit http://www.bxventure.com. If you have questions about the BX Venture Market, contact Virgil Hlus of Clark Wilson LLP at vzh@cwilson.com.
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