How Do Companies Get Listed on the New York Stock Exchange?

Public companies can apply for listing on the NYSE.

The NYSE is the largest stock exchange in the United States. Publicly owned companies must submit an application, pay the listing fee and meet certain shareholder and financial criteria in order to receive an NYSE listing. Public listing on the exchange occurs on average about one to two months after the exchange approves a company's listing application. After the exchange approves a company for initial listing, the company must meet continued listing requirements to remain listed on the NYSE.

Application

The first step a company must take to get a listing on the NYSE is to submit an application. The exchange does not have blank application forms. Instead, the company must submit its request for listing as well as the following documentation: corporate bylaws, five years of annual shareholder reports, copies of the company's stock or bond certificates, a copy of the current year's Form 10-K filed with the SEC, a proposed schedule of expected stock distribution and a proxy statement from the current year's annual shareholder meeting.

Shareholder Criteria

In order to receive listing on the exchange, a company must plan to issue at least 1.1 million shares outstanding to a minimum of 400 shareholders. Any shares held by corporate executives, their immediate families or any other group that represents more than 10 percent or more of the total shares outstanding are not included in the total amount of public shares. The market value of the public shares must be at least $40 million, making the minimum share price $4 at the time of the company's initial public offering, or IPO.

Earnings

The exchange applies an earnings test to companies seeking listing on the NYSE. To pass the earnings test for listing, a company must have a total of $10 million in aggregate pre-tax earnings for the last three fiscal years. Out of the aggregate $10 million, the company must have earned $2 million in the most recent year and $2 million in the year before that. The company must show positive earnings for all of the last three most recent fiscal years. If it does not show positive earnings for all three years, its aggregate earnings must be $12 million for the three most recent fiscal years. The company must have earned at least $5 million of the aggregate $12 million in the most recent year and $2 million in the year before that.

Cash Flows Valuation

If a company does not meet the earnings test, the exchange may apply a valuation based on cash flows in order to qualify the company for listing. To pass the valuation test using cash flows, the total value of all the company's shares outstanding, or global market capitalization must be at least $500 million. The company must demonstrate revenues of at least $100 million in the past 12 months and have aggregate cash flows for the past three years totaling $25 million. Additionally, a company cannot have any negative cash flow amounts in the three most recent fiscal years.

Revenue Valuation

If a company does not meet the earnings or cash flows criteria, it may still receive listing on the stock exchange using the revenue valuation test. Using this test the company's global market capitalization must be at least $750 million. Another qualifying criteria of this test is that the company must show revenues of at least $75 million in the most recent fiscal year. If a company fails to meet the revenue, cash flows or earnings test, it will not receive a listing on the NYSE.

References

• The New York Stock Exchange: Listed Company Manual
• CF Tech: New York Stock Exchange Listing Requirements and Historical Records