Rule 1: market cap
Rule 2: Asset
Rule 3: tax
Rule 4: share price
Rule 5: Earning
Quick Pick :
Stock exchange use market cap value, cash flow Asset, tax, share price and also they consider industry Earning to list companies.
There are lots of stock exchange around the world but every stock exchange primary goal is to list the quality industry at the end.
So every exchange have the different requirements for their industries. Once they have any of the companies are not applied to their requirements.
Then they delisted from their exchange. delisted company might prefer to choose to list on any other exchange industry which requires very low requirements.
Or else they have the chance to trade over the counter to raise the money for their company.
It doesn’t matter how much different requirements exchange have around the world but their core goal is to have certain some same primary rules.
this article occupied the information about what are the things that every exchange is looking for.
Rule 1: market cap
Market cap means market capitalization. Let’s say your running a business, which have more customers base even when you don’t have any big profits
Where you could able to service your business for long time, it’s completely take time to get your business out of the market
Because of only the reason that people’s are ready to pay for your business ownership are more than its worth it, the total ownership worth is called as market capital.
When you don’t have enough market capital for your business there is high likely you get out of the business soon as possible. Not quality companies alone have low market capital.
That’s why every stock exchange goal is to list the industry with minimum capital.
Minimum capital requirement are anything that vary depending on the exchange you want listed.
Some exchange require minimum of $10 million, other might be $100 million and so on… with decent share issue.
But every exchange definitely required some amount of minimum capital.
To find the minimum requirements of the exchange, go to your country exchange website and read the capital requirement of the current year.
This capitals are fundamentally based on the Asset. If the industry don’t have strong asset it’s hard for the company to build the strong market capital.
Rule 2: Asset
When talk about asset all comes to which the things produce cash flow are assets.
But the asset have two types one is tangible and other is intangible.
Tangible Asset are the things which
able to see and touch like any normal material, look at the McDonald’s it’s all have tangible
Such as restaurant food, place, materials to produce food extra…
And on the other hand look at the Google business completely intangible. Which not able to touch.
People’s easily calculate the worth of the item in McDonald’s but they don’t have any idea what price to pay for Google and feel difficult to calculate worth of item which are intangible.
That’s why more tangible asset business are build market cap easily than intangible.
Nowadays big stock exchange are requiring $75 millions in assets and big pre tax income .
Rule 3: tax
Without makings great amount of money any business can’t have big pre-tax income
Pre-tax income is a income where business have before it’s paying the any federal tax or state tax to the government.
So exchange main looking for the quality business to list through pre-tax income.
And maintaining the good share price with enough liquidity.
Rule 4: share price
When comes to think about share price. Share price don’t have any mechanical behind the business.
Share price are determined by enough supply and demand in the market.
When the business lack of enough liquidity in the market, most high quality stock exchange delisted them with it.
If every shares price is 1 to 90 cent means for the quality industry, it’s doesn’t any attractive to investor for the reason of lack of liquidity.
If the stock doesn’t contain enough liquidity, the investor couldn’t sell or bought the shares easily. For the reason it’s takes lots of time to executed and trade it.
That’s why exchange like New York stock exchange are need minimum of $4 per share and 1.5 millions shares outstanding on the requirements.
But this might vary on different country exchanges, so to know the current requirements, check your own country exchange website.
If company have lack of market capital and non judge intangible asset , less pre-tax income and low share price of low liquidity extra… All this problem arise from lack of earning of income in the company.
Rule 5: Earning
Earnings are not magic numbers, it’s a complete hard work of the management and industry leaders.
Any Companies doesn’t simply increase the company net income just easily. Number anyway won’t lie.
Once company have great Earning it’s must have great leader and management too. It also have then good demand for the ownership shares.
Not only exchange, most investors determine the shares worth depends on the earning of the company because of more intangible asset in the company like Google and Facebook.
Still today that’s why big exchange are looking for minimum of 10 to 100 millions in yearly earnings.
Market rule: #100119
Listing company is the crucial part of the every private to public stock exchange, any stock exchange that do any misleading activities on listing your company against the government law. You could able to raise the complaint to the SEC.
If your investors and not comfortable or align investing with based on market rules please learn about how to regulate your investments under your control with use of Rule investing.