What Are The Qualifications Needed to Trade on the American Stock Exchange?

AMEX, the NYSE and NASDAQ are the three major stock exchanges in the U.S.

AMEX, the NYSE and NASDAQ are the three major stock exchanges in the U.S.

If you’ve ever dreamed of starting your own company and selling stock on an exchange, the American Stock Exchange (AMEX) would be the place to start. AMEX is ideal for fledgling companies or those not financially strong enough to meet New York Stock Exchange or NASDAQ listing qualifications. AMEX has four different ways your company can qualify for listing. You select the standard that best matches your company’s financial strength, then file the application and pay the filing fee. Although NYSE-Euronext bought AMEX in 2008, AMEX remains the exchange of choice for micro-cap and small-cap companies.

Qualification Standard 1

To meet Standard 1 requirements, your company must have at least $4 million in stockholders’ equity. You must have pre-tax income of $750,000 in the last fiscal year, or in two of the past three fiscal years. The market value of the public float, which is the number of stock shares available for the public to trade, must be worth at least $3 million. You can’t price your stock below $3 a share. There is no minimum operating history requirement, which is the number of years your company has been in operation, to meet.

Qualification Standard 2

With Standard 2, you don’t have to meet any market capitalization or pre-tax income requirements. Your public float market value must be $15 million or more and your stock selling price at least $3 a share. Stockholders’ equity must equal or exceed $4 million. You must be in business two years or more to qualify for Standard 2 registration.

Qualification Standard 3

To meet Standard 3 requirements, you must have $4 million in shareholders’ equity and a market capitalization of $50 million. The public float market value must be at least $15 million and the stock price at least $2 a share. You must meet the requirements for the minimum number of stockholders and the number of stock shares sold in one of three ways. You can have 800 shareholders owning 500,000 stock shares or 400 shareholders owning 1 million shares. You can have 400 shareholders owning 500,000 shares if you have an average daily trading volume of 2,000 shares for the past six months.

Qualification Standard 4

Standard 4 is useful for new companies or established micro companies. There are no stockholders’ equity amounts or pre-tax income minimums to meet. The market value of your stock float must be at least $20 million and your stock price can’t be below $3 a share. You can meet the market capitalization requirement in one of two ways. Your company’s market capitalization can be $75 million or higher, or your company’s total assets can equal $75 million and your revenue be $75 million or higher.

AMEX Delisting

If your stock falls below $1 a share or you don’t file your corporate financial documents timely, you stock could be delisted from AMEX. Other reasons for delisting include your stock being thinly traded and having too few stockowners. After AMEX contacts you about delisting, you have 45 days to file a plan to show how you will correct the problem. If AMEX doesn’t accept your plan, the exchange will proceed with the delisting process.

 

About the Author

Based in St. Petersburg, Fla., Karen Rogers covers the financial markets for several online publications. She received a bachelor's degree in business administration from the University of South Florida.

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