Question

compare and contrast the NYSE with the NASDAQ. What are the listing requirements for both markets? Typically, what types of companies would you find listed on each market?

Answer 1

1. NASDAQ is a dealer's market ie investors deal with an intermediary which acts like a counterparty to every transaction. Investors dont deal with each other in NASDAQ where as in NYSE they do
2. NASDAQ has a majority of technology oriented growth stocks therefore the volatility is higher in this stock exchange while while NYSE has more value stocks of established companies having lesser volatility
3. NASDAQ doesn't have a physical trading location. It is done electronically through computers while NYSE is more traditional and has a physical trading system as well.
4. To enable effectiveness in trading, NASDAQ dealers act as counterparty to the transaction on behalf of the investors but in NYSE, the effectiveness is maintained only to the extent of facilitating the market of buyers and sellers by prescribing the trading parameters.

Listing requirements:

• NASDAQ:
  • Any company should have at least 1.25 million shares for the public to trade
  • Fee structure is one time entry fee of $50000-75000 along with an annual fee of 30000
  • Minimum 3 dealers are required per company to deal with the stock of the company
• NYSE
  • Any company should have at least 1.10 million shares issued to a minimum of 400 shareholders
  • Fee structure is higher and fees can be as high as $0.5 million
  • Share price should be at least $4 and the equity value should be at leas $40,000,000