The United States, as one of the most important global capital markets, attracts the attention of companies worldwide with its mature market system, transparent regulatory environment, and strong capital absorption capabilities. Listing not only brings funds to companies and enhances brand influence but also improves management levels through standardized governance structures.
I.Differences in U.S. Listing Segments
The U.S. stock market is renowned for its multi-level listing segments, which provide different listing standards and market environments based on the size, maturity, and industry characteristics of companies. The differences among these segments are not only reflected in listing standards but also in ongoing regulation and market services for listed companies. Each segment has its unique market positioning and target company group. Companies need to choose the right segment based on their financial status, market positioning, and long-term development strategy. Here is a detailed introduction to the main U.S. listing segments:
1. NASDAQ
- Nasdaq Global Select Market
The Global Select Market is the highest level segment of NASDAQ, with the strictest listing standards globally. This segment mainly targets the world's largest listed companies, including many well-known international enterprises. Listing standards include financial and liquidity standards, requiring companies to meet certain conditions in terms of pre-tax income, market value, cash flow, etc. For example, companies must meet one of the following four financial standards: pre-tax income, market value + cash flow standard, market value + income standard, asset and equity standard. In addition, companies in the Global Select Market must also meet certain liquidity standards, such as shareholder equity and public float.
- Nasdaq Global Market
The Global Market mainly serves medium-sized listed companies, which need to meet certain standards in terms of finance and liquidity. This segment evolved from the previous NASDAQ National Market and aims to attract more international companies. The listing standards for the Global Market are relatively relaxed compared to the Global Select Market but still require companies to reach certain standards in market value, revenue, or cash flow.
- Nasdaq Capital Market
The Capital Market mainly targets small and medium-cap stocks, especially those companies in the growth stage. The listing standards for this segment are relatively low, focusing more on the potential and future development prospects of the company. Many Chinese concept companies choose this segment when going public, especially those using the "net income standard," which requires operating net income to be "$750,000 in the most recent fiscal year or two of the last three fiscal years," a standard much lower than domestic financial requirements, providing a more relaxed listing condition for Chinese concept companies.
2. New York Stock Exchange (NYSE)
- Main Board Market (NYSE)
The main board market of the New York Stock Exchange is one of the largest stock trading markets globally, mainly serving large and medium-sized enterprises. The listing standards are high, requiring companies to have a certain market value, revenue, and shareholder equity. For example, non-U.S. companies listing on NYSE's global standards require a market value of at least $100 million; cumulative net income for the past three years must reach $10 million, with at least $50 million of income from markets outside the United States.
- Small and Medium Board Market (NYSE MKT, also known as NYSE American)
The Small and Medium Board Market mainly serves companies with smaller market value and high-growth enterprises in the initial stage. The listing standards for this segment are relatively relaxed, providing a more accessible capital market platform for small and medium-sized enterprises. NYSE American's predecessor was the American Stock Exchange, which provides listing and trading services for high-tech enterprises and small and medium-sized high-growth companies.
II.Listing Costs and Fee Structure
1. Pre-listing Preparation Costs
Pre-listing preparation costs are a series of expenses that companies must pay befoe officially going public. These costs include but are not limited to:
- Legal Advisor Fees: Companies need to hire legal advisors to handle legal affairs during the listing process, including due diligence, contract drafting, compliance review, etc.
- Audit Fees: Companies must undergo audits by independent audit institutions to ensure the accuracy and transparency of financial statements to meet SEC regulatory requirements.
- Financial Advisor Fees: Financial advisors help companies plan listing strategies, valuation, and market positioning. Fees vary based on the content and complexity of the services provided.
- Printing Costs: The cost of preparing and printing prospectuses and other listing-related documents.
- Roadshow and Promotion Costs: Companies need to conduct roadshows before listing to introduce the company to potential investors, involving travel, accommodation, meeting organization, and other expenses.
2. Exchange Listing Fees
When listing in the United States, companies need to pay fixed fees to the exchange, including listing fees and annual fees. Here are the specific fee situations for the New York Stock Exchange (NYSE) and NASDAQ:
- NYSE
Listing Fee: According to search results, the listing fee for the New York Stock Exchange is relatively fixed. The initial listing fee for common stocks is a flat rate of $295,000, which includes a $25,000 application fee and a one-time fee of $50,000, as well as a fee of $0.004 per share, with a maximum of $295,000. For additional categories of common stocks listed, the flat rate is $5,000.
Annual Fee: The annual fee increases based on the number of listed shares, starting at a minimum of $74,000 and increasing based on the number of listed shares. Companies must pay $0.001215 per share or $80,000 per year, whichever is higher.
- NASDAQ
Listing Fee: NASDAQ's listing fees vary depending on the market segment and the number of shares issued. The entrance fee for the Global Select Market and the Global Market is a fixed $270,000, including a $25,000 application fee. For the Capital Market, the entrance fee is $50,000 for shares with a total circulation of less than 15 million shares, including a $5,000 application fee; for shares with a total circulation exceeding 15 million shares, the entrance fee is $75,000, including a $5,000 application fee.
Annual Fee: NASDAQ implements an all-inclusive fee plan, where companies pay a single annual fee covering all ordinary listing fees for that year. For Chinese companies in the Select Market and Global Market with a market value of less than $50 million, the fee is approximately $70,000; for those with a market value greater than $50 million, the fee is $100,000. The Capital Market is relatively cheaper, with a fee of approximately $60,000.
3. Ongoing Compliance Costs
After listing, companies need to continue to comply with SEC disclosure requirements, which involve:
- Periodic Reporting Costs: Including the preparation and submission costs of annual reports, quarterly reports, and temporary announcements.
- Legal Advisor Fees: Ongoing legal consulting and compliance service fees.
- Audit Fees: Listed companies need to be audited annually to ensure the accuracy of financial statements.
4. Other Related Costs
In addition to the above costs, listed companies may also face the following costs:
- Investor Relations Management Costs: Including the salaries of the investor relations team, the organization costs of investor activities, and the costs of communication tools.
- Marketing Costs: To enhance the company's image and increase stock liquidity, listed companies may need to conduct marketing activities, including advertising, public relations activities, etc.
- Transaction Costs: When listed companies engage in equity financing, mergers and acquisitions, restructuring, and other transaction activities, they need to pay investment banking fees, transaction lawyer fees, due diligence fees, etc.
The differences among various listing segments in the United States and their listing costs and fee structures have a profound impact on corporate decision-making. Companies must deeply analyze their size, business uniqueness, financial health, and long-term development strategy when choosing the right listing segment. These factors together determine whether a company can succeed in the capital market. At the same time, companies also need to carefully plan and budget for various costs and fees that may arise during the listing process. This is not only related to the success or failure of the initial listing but also crucial for the company's continued development and market performance after listing. A wise decision can ensure that the company occupies a favorable position in the fierce market competition while providing confidence and potential for value growth to investors.
Reference:
Rules | The Nasdaq Stock Market
The NYSE and Nasdaq: How They Work
Fees | New York Stock Exchange | Cross-Border Listings Guide | Baker McKenzie Resource Hub
NASDAQ Global Select Market Composite: What it is, How it Works
New York Stock Exchange (NYSE): Definition, How It Works, History
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