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Listing Critieria - Tier I
Issuers should consider whether to list their securities under the Tier
I or Tier II listing standards. While all listed issues will be traded
pursuant to the identical Exchange auction rules, issues listed pursuant
to the Tier I and Tier II standards may be distinguished with respect
to blue sky exemptions, transactions reporting symbols, listing fees and
maintenance standards. The Exchange will identify and distinguish at all
times which securities are listed pursuant to the Exchange's Tier I and
Tier II standards. An issuer seeking to list its securities pursuant to
the Tier I standards must satisfy one of the two alternative Tier I quantitative
criteria and an issuer seeking to list its securities pursuant to the
Tier II standards must satisfy the Tier II quantitative criteria. Issuers
listing under either criteria must adhere to the policies and procedures
and the corporate governance criteria provided in Rules 812 through 851.
The Exchange also places great emphasis upon the level of public interest
in the securities of an issuer. Causes for concern may include a low trading
volume on another Exchange, lack of dealer interest in the over-the-counter
market, unusual geographical concentration of shareholders or a low rate
of transfers. Under such circumstances, the Exchange may implement a higher
distribution standard provided it perceives a relatively low level of
investor interest.
The listing criteria for Tier I Issues are as follows:
(a)
In the case of Common Stock:
(1) Net Tangible Assets - Total Assets (including the value of patents,
copyrights and trademarks but exclude the value of goodwill) less total
liabilities of at least $4,000,000.
(2) Earnings - Pre-tax income of $750,000 and net income of at least
$400,000 in its last fiscal year.
(3) Public Distribution - at least 500,000 publicly held shares and
at least 800 public shareholders if the issuer has between 500,000 and
1 million shares publicly held, or at least 400 public shareholders
if the issuer has either (i) over 1 million shares publicly held or
(ii) over 500,000 shares publicly held and average daily trading volume
in excess of 2,000 shares per day for a six month period preceding the
date of application.
(4) Stock Price/Market Value of Shares Publicly Held - $5 per share
on each of the five business days prior to the application date and
$3,000,000 aggregate market value.
(5) Voting Rights - See Rule 812
(b) In the case of Preferred Stock:
(1) Net Tangible Assets and Earnings - The issuer meets the net tangible
assets and earnings criteria for common stock and appears to be able
to service the dividend requirements of the issue.
(2) Public Distribution - If issuer's common stock is listed and traded
on the Exchange (or the American Stock Exchange or New York Stock Exchange):
Preferred Shares Publicly Held 100,000
Aggregate Market Value/Price $2,000,000/$10
If not so listed and traded:
Preferred Shares Publicly Held 400,000
Public Round-lot Holders 800
Aggregate Market Value/Price $4,000,000/$10
(3) Voting Rights - See Rule 812
(c) In the case of Bonds, Debentures and Notes:
(1) Net Tangible Assets and Earnings - The issuer meets the net tangible
assets and earnings criteria for common stock and appears to be able
to satisfy interest and principal when due.
(2) Public Distribution - If issuer's common stock is listed and traded
on the Exchange (or the New York Stock Exchange or the American Stock
Exchange):
Principal Amount/Aggregate Market Value $5,000,000
Number of Public Holders 100
If not so listed and traded:
Principal Amount/Aggregate Market Value $20,000,000
Number of Public Holders 100
(3) Current last sale information must be publicly available and independently
certifiable with respect to the underlying security into which the bond
or debenture is convertible.
(4) Redeemable issues must provide for redemption pro rata or by lot.
(d) In the case of Warrants:
(1) Net Tangible Assets and Earnings - The issuer meets the tangible
assets and earnings criteria for common stock.
(2) Public Distribution - The issuer meets the distribution criteria
for equity issues. However, if the warrant issue is sold as part of
a unit offering consisting of warrants and other securities, a minimum
of 500,000 warrants must be publicly held by not less than 400 public
holders.
(3) The common stock or other securities underlying the warrants must
be listed on the Exchange (or on the American Stock Exchange or the
New York Stock Exchange).
(e) In the case of Warrants based on Established Market Indices
or Warrants based on Currency, the minimum criteria shall be the following,
in addition to the minimum criteria established for warrants generally:
- Issuer total assets in excess of $100 million; and
- Minimum public distribution of 1,000,000 warrants with a minimum
of 400 public holders of those warrants; and
- An aggregate market value of $4 million or,
- Warrants which have already been approved for listing on another
national securities exchange.
(f) In the case of Other Securities, the Exchange will consider
listing any security not otherwise covered by the criteria set forth in
this rule, provided the issue is otherwise suited for auction market trading.
Such issues will be evaluated for listing against the following criteria:
- Assets/Equity - The issuer shall have total assets in excess of
$100 million and shareholders' equity of at least $10 million.
- Earnings - The issuer shall have at least $100,000 in pre-tax income
in three of the four prior fiscal years. In the case where the issuer
is unable to satisfy this earnings criteria, the Exchange generally
will require the issuer to have the following: (i) assets in excess
of $200 million and shareholders' equity of at least $10 million:
or (ii) assets in excess of $100 million and shareholders' equity
of at least $20 million.
- Distribution - Minimum public distribution of 1 million trading
units including a minimum of 400 public holders or, if traded in thousand
dollar denominations, a minimum of 100 public holders.
- Aggregate Market Value/Principal Amount - Not less than $20 million.
- Cash Settlement Provisions - Where the instrument contains cash
settlement provisions, settlement must be made in U.S. dollars.
- Redemption Provisions - Where the instrument contains redemption
provisions, the redemption price may not be below $3 per unit. Prior
to commencement of trading of securities admitted to listing under
this paragraph, the Exchange will evaluate the nature and complexity
of the issue and, if appropriate, distribute a circular to the membership
providing guidance regarding member firm compliance responsibilities
when handling transactions in such securities.
(g) In the case of Contingent Value Rights:
(1) Issuer must meet the financial listing criteria for common stock;
(2) Issuer total assets in excess of $100 million;
(3) Minimum public distribution of 600,000 rights with a minimum
of 400 public holders of those rights;
(4) Aggregate market value of $18 million; and
(5) The rights must have a term of at least one year; or
(6) Contingent value rights have already been approved for trading
on another national securities exchange.
-
Prior to the commencement of trading of securities admitted to
listing under this paragraph, the Exchange will distribute a circular
to the membership explaining specific risks associated with CVRs
and emphasizing the need to disclose to CVR investors the special
characteristics of CVRs and suggesting that transactions in CVRs
be recommended only to investors whose accounts have been approved
for options trading or after ascertaining that CVRs are suitable
for the customer.
Alternative Listing Criteria - Tier
I
The Exchange recognizes that certain financially
sound companies may be unable to meet its full listing criteria
due to the nature of their business. Such companies may still
be eligible for listing provided the following criteria are met:
(1) Net Tangible Assets - Total Assets (including the value
of patents, copyrights and trademarks, but excluding the value
of goodwill) less total liabilities must be $12 million;
(2) 1,000,000 shares publicly held with at least 800 public
shareholders if the issuer has between 500,000 and 1 million
shares publicly held, or at least 400 public shareholders if
the issuer has either (i) over 1 million shares publicly held
or (ii) over 500,000 shares publicly held and average daily
trading volume in excess of 2,000 shares per day for a six month
period preceding the date of application.
(3) Stock price of $3 per share on each of the five business
days prior to the application date;
(4) Aggregate Market Value of $15,000,000
(5) Three years of operating history;
(6) Voting Rights - See Rule 812;
(7) The company must have sufficient financial resources to
continue operating over an extended period of time and its securities
are regarded by the Exchange as suitable for listing and auction
market trading.
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