NASDAQ or the National Association of Securities Dealers Automated Quotations is an American stock exchange, second largest stock exchange in the world after New York Stock Exchange (NYSE) in terms of market capitalization. It was founded in 1971 as the world's first electronic stock market. In 2006 Nasdaq changed its status from a stock market to a licensed security exchange. With approximately 3,900 listings Nasdaq has market capitalization of around $10 trillion from various industry sectors like technology, telecommunication, healthcare and financials. Nasdaq's normal trading sessions are between 9:30 a.m. and 4:00 p.m. Eastern Standard Time and offers quotes at three levels.
The Nasdaq stock market has three distinctive tiers: The Nasdaq Global Select which consist of U.S. based and international stocks that represent the Global Select Market Composite. It has the most stringent financial and liquidity requirements.
The Nasdaq Global market includes stock that represent the Nasdaq Global market. It has less strict financial and liquidity requirements and is less exclusive than Nasdaq Global Select tier.
The Nasdaq Capital Market is made up of early stage companies that have relatively small market capitalization. Listing requirements for Nasdaq Capital Market are less stringent than for other two tiers.
All companies that wish to be listed on Nasdaq must adhere to corporate government requirements and every tier has its own unique listing requirements.
For listing on Nasdaq Global Select companies must meet certain liquidity requirements regarding round lot and total shareholders, average monthly trading volume over past twelve months, publicly held shares, their market value and stockholder's equity. When it comes to financial requirements company must met all the criteria in one of four financial standards: Earnings, Capitalization with cash flow, Capitalization with revenue, Assets with equity. Listing on Nasdaq Global market requires that company must meet all of the criteria under at least one of the four standards: Income standard, Equity standard, Market value standard, Total asset/total revenue standard. Companies that wish to be listed on Nasdaq Capital market have to meet all criteria under one of the three standards: Equity standard, market value of listed securities standard or Net income standard. For detailed explanation click here.
All three tiers of Nasdaq stock have high standards regarding corporate governance. Companies are subject to the following corporate government requirements: Distribution of annual or interim reports, Independent directors, Audit committee, Compensation of executive officers, Nomination of directors, Code of conduct, Annual meeting, Solicitation of proxies, Quorum, Conflict of interest, Shareholder approval and Voting rights.
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