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North American Exchanges A brief outline to getting started

North American Exchanges A brief outline to getting started

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Page 1: North American Exchanges A brief outline to getting started

North American ExchangesNorth American ExchangesA brief outline to getting startedA brief outline to getting started

Page 2: North American Exchanges A brief outline to getting started

AgendaAgenda

Exchange History/Securities Traded NYSE NASDAQ TSX TSX-V

Listing Requirements NYSE NASDAQ TSX TSX-V

Cross Listing

Exchange History/Securities Traded NYSE NASDAQ TSX TSX-V

Listing Requirements NYSE NASDAQ TSX TSX-V

Cross Listing

Page 3: North American Exchanges A brief outline to getting started

Exchange OverviewExchange Overview

United States Exchanges1. AMEX 2. NYSE 3. NASDAQ

BULLETIN BOARD PINK SHEETS

Canadian Exchanges1. TSX

2. TSX-V

United States Exchanges1. AMEX 2. NYSE 3. NASDAQ

BULLETIN BOARD PINK SHEETS

Canadian Exchanges1. TSX

2. TSX-V

Page 4: North American Exchanges A brief outline to getting started

American Stock ExchangeAmerican Stock Exchange

History:Began in 1800s

Streets of New York

1921 moved indoors to Trinity Place

Merged with NASDAQ in 1998

History:Began in 1800s

Streets of New York

1921 moved indoors to Trinity Place

Merged with NASDAQ in 1998

Page 5: North American Exchanges A brief outline to getting started

3rd largest exchange in North America

Auction Market

Caters to smaller companies

Owned by NASD

3rd largest exchange in North America

Auction Market

Caters to smaller companies

Owned by NASD

American Stock ExchangeAmerican Stock Exchange

Page 6: North American Exchanges A brief outline to getting started

Common and Preferred stock

Exchange Traded Funds ( over 200 )

Options One of the largest options exchanges in the world

Options are traded on Common stock, ETF’s, ADR’s, HOLDR’s, LEAP’s, FLEX’s

Common and Preferred stock

Exchange Traded Funds ( over 200 )

Options One of the largest options exchanges in the world

Options are traded on Common stock, ETF’s, ADR’s, HOLDR’s, LEAP’s, FLEX’s

American Stock ExchangeAmerican Stock Exchange

Page 7: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock Exchange

Began in 1972

Focused on Government Securities in early years

Dow Jones began following NYSE in 1896

Began in 1972

Focused on Government Securities in early years

Dow Jones began following NYSE in 1896

Page 8: North American Exchanges A brief outline to getting started

Top Companies:

Walt DisneyWal MartFord3MProctor & Gamble

Top Companies:

Walt DisneyWal MartFord3MProctor & Gamble

New York Stock ExchangeNew York Stock Exchange

Page 9: North American Exchanges A brief outline to getting started

NASDAQNASDAQ

Began in 1971 as the 1st electronic exchange in the world

Increase trading of OTC stock

Dealers market

Began in 1971 as the 1st electronic exchange in the world

Increase trading of OTC stock

Dealers market

Page 10: North American Exchanges A brief outline to getting started

Top Companies:

APPLEMicrosoft IntelGoogleSun Microsystems

Top Companies:

APPLEMicrosoft IntelGoogleSun Microsystems

NASDAQNASDAQ

Page 11: North American Exchanges A brief outline to getting started

OTC Bulletin Board/Pink Sheets

OTC Bulletin Board/Pink Sheets

Began in June 1990 on a pilot basis

Approved for permanent status in 1997

Provide Transparency in OTC markets

Began in June 1990 on a pilot basis

Approved for permanent status in 1997

Provide Transparency in OTC markets

Page 12: North American Exchanges A brief outline to getting started

Securities include:National, regional and foreign equity

issues

Warrants

Units

American Depositary Receipts (ADRs)

Direct Participation Programs (DPPs)

Securities include:National, regional and foreign equity

issues

Warrants

Units

American Depositary Receipts (ADRs)

Direct Participation Programs (DPPs)

OTC Bulletin Board/Pink Sheets

OTC Bulletin Board/Pink Sheets

Page 13: North American Exchanges A brief outline to getting started

Toronto Stock ExchangeToronto Stock Exchange

Began in 1852

Largest stock exchange in Canada, 7th largest in the world

Lists 4,000 securities, averaging 250 million shares traded per day.

Began in 1852

Largest stock exchange in Canada, 7th largest in the world

Lists 4,000 securities, averaging 250 million shares traded per day.

Page 14: North American Exchanges A brief outline to getting started

Owned and run by TSX Group

Trades senior securities with strong historical performance

Became “for profit” company in 2000

Owned and run by TSX Group

Trades senior securities with strong historical performance

Became “for profit” company in 2000

Toronto Stock ExchangeToronto Stock Exchange

Page 15: North American Exchanges A brief outline to getting started

Top Companies:Suncor

EnCana

Shell Canada

TD Bank

RBC

Top Companies:Suncor

EnCana

Shell Canada

TD Bank

RBC

Toronto Stock ExchangeToronto Stock Exchange

Page 16: North American Exchanges A brief outline to getting started

TSX Venture ExchangeTSX Venture Exchange

Began as Canadian Venture Exchange

(CDNX)

Acquired by TSX group in 2001

For companies who do not meet listing requirements of TSX

Began as Canadian Venture Exchange

(CDNX)

Acquired by TSX group in 2001

For companies who do not meet listing requirements of TSX

Page 17: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock Exchange

Listing RequirementsUS CompaniesNon-US Companies

Associated Fees

Continued Listing Requirements

Listing RequirementsUS CompaniesNon-US Companies

Associated Fees

Continued Listing Requirements

Page 18: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock Exchange

Meet certain qualifications1. National interest2. Stability in industry3. Engaged in expanding industry

Keep public informed

Must be a going concern

Meet certain qualifications1. National interest2. Stability in industry3. Engaged in expanding industry

Keep public informed

Must be a going concern

Listing Requirements

Page 19: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock ExchangeListing Requirements – US Companies

Companies listing in connection with an IPO,Affiliated Companies, andCompanies listing following emergence from bankruptcy:

Number of holders of 100 shares of more or of a unit of trading if less than 100 sharesand

400

Number of publicly held shares 1,100,000

Page 20: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock Exchange

Companies listing in connection with a transfer or quotation:

Number of holders of 100 shares of more or of a unit of trading if less than 100 sharesor

400

Total stockholders, together withAverage monthly trading volumeor

2,200100,000 shares

Total stockholders, together withAverage monthly trading volumeand

5001,000,000 shares

Number of publicly held shares 1,100,000

Listing Requirements – US Companies

Page 21: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock ExchangeListing Requirements – Non-US Companies

A company must meet the following distribution and size requirements:

Number of shareholder, holders of 100 or more shares

5,000 Worldwide

Number of shares publicly held 2.5 million Worldwide

Market value of publicly-held sharesOr for the companies listing under theAffiliated Company standard

$100 million Worldwide

$60 million Worldwide

Page 22: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock ExchangeAssociated Fees

Listing FeesCalculating Listing Fees

US Issuers Foreign Private Issuers

Annual fees US Issuers Foreign Private Issuers

Maximum Payable Annual Fees

Listing FeesCalculating Listing Fees

US Issuers Foreign Private Issuers

Annual fees US Issuers Foreign Private Issuers

Maximum Payable Annual Fees

Page 23: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock Exchange

For companies that listed under the Earnings standard:

Average global market capitalization over a consecutive 30 trading-day period is less than:and

$75 million

Total stockholders equity is less than:or

$75 million

Average global market capitalization over a consecutive 30 trading-day period is less than:

$25 million

Continued Listing Requirements

Page 24: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock Exchange

For companies that listed under the Pure Valuation with Cash Flow standard:

Average global market capitalization over a consecutive 30 trading-day period is less than:and

$250 million

Total revenues for the most recent 12 months:or

$20 million

Average global market capitalization over a consecutive 30 trading-day period is less than:

$75 million

Continued Listing Requirements

Page 25: North American Exchanges A brief outline to getting started

New York Stock ExchangeNew York Stock Exchange

For companies that listed under the Pure Valuation standard:

Average global market capitalization over a consecutive 30 trading-day period is less than:and

$375 million

Total revenues for the most recent fiscal year are less than:or

$15 million

Average global market capitalization over a consecutive 30 trading-day period is less than:

$100 million

Continued Listing Requirements

Page 26: North American Exchanges A brief outline to getting started

NASDAQNASDAQ

Listing RequirementsGlobal Select MarketGlobal MarketCapital Market

Associated FeesEntry FeesAnnual Fees

Continued Listing Requirements

Listing RequirementsGlobal Select MarketGlobal MarketCapital Market

Associated FeesEntry FeesAnnual Fees

Continued Listing Requirements

Page 27: North American Exchanges A brief outline to getting started

NASDAQNASDAQListing Requirements

Requirements Standard 1 Standard 2 Standard 3Net Tangible Assets $6 million $18 million N/A

Market CapitalizationTotal AssetsTotal Revenue

N/A N/A $75 millionor

$75 millionor

$75 million

Pretax Income(latest fiscal yr or 2 of last 3 fiscal yrs)

$1 million N/A N/A

Public Float (shares) 1.1 million 1.1 million 1.1 million

Operating History N/A 2 years N/A

Market Value of Shares

$8 million $18 million $20 million

Minimum Bid Price $5.00 $5.00 $5.00

Round Lot Shareholders

400 400 400

Market Makers 3 3 4

Corporate Governance

Yes Yes yes

Page 28: North American Exchanges A brief outline to getting started

NASDAQNASDAQAssociated Fees – NASDAQ Global Select & Global Market

Entry fees Entry feesShares Entry Fees

Up to 30 million $100,000

30+ to 50 million $125,000

Over 50 million $150,000

Annual fees Annual feesTotal Shares Outstanding

Annual Fees Annual Fees for ADRs

Up to 10 million $30,000 $21,225

10+ to 25 million $35,000 $26,500

25+ to 50 million $37,500 $29,820

50+ to 75 million $45,000 $30,000

75+ to 100 million $65,500 $30,000

100+ to 150 million $85,000 $30,000

Over 150 million $95,000 $30,000

Page 29: North American Exchanges A brief outline to getting started

NASDAQNASDAQAssociated Fees – NASDAQ Capital Market

Entry fees Entry feesShares Entry Fees

Up to 15 million $50,000

Over 15 million $75,000

Annual fees Annual feesTotal Shares Outstanding

Annual Fees Annual Fees for ADRs

Up to 10 million $27,500 $17,500

Over 10 million $27,500 $21,000

Page 30: North American Exchanges A brief outline to getting started

NASDAQNASDAQContinued Listing Requirements

Requirements Standard 1 Standard 2Net Tangible Assets $4 million N/A

Market CapitalizationTotal AssetsTotal Revenue

N/A $50 millionor

$50 millionor

$50 million

Pretax Income(latest fiscal yr or 2 of last 3 fiscal yrs)

$1 million N/A

Public Float (shares) 750,000 1.1 million

Operating History N/A N/A

Market Value of Shares $5 million $18 million

Minimum Bid Price $1.00 $5.00

Round Lot Shareholders 400 400

Market Makers 2 4

Corporate Governance Yes Yes

Page 31: North American Exchanges A brief outline to getting started

Toronto Stock ExchangeToronto Stock Exchange

Listing RequirementsWho Should List?Financial RequirementsForeign Companies

Associated Fees

Listing RequirementsWho Should List?Financial RequirementsForeign Companies

Associated Fees

Page 32: North American Exchanges A brief outline to getting started

Toronto Stock ExchangeToronto Stock Exchange

Who Should List?Well ManagedGrowth OrientedStrong Track RecordPublicly Distributed

Who Should List?Well ManagedGrowth OrientedStrong Track RecordPublicly Distributed

Listing Requirements

Page 33: North American Exchanges A brief outline to getting started

Toronto Stock ExchangeToronto Stock Exchange

Financial RequirementsFinancial Requirements

Listing Requirements

Canadian Companies

Minimum number of shareholders 300

Number of publicly traded shares at the time of issue 1,000,000

Minimum value of these 1,000,000 shares $4,000,000

Net Tangible Assets $2,000,000

Earnings from ongoing operations $300,000

Cash Flow preceding listing $700,000

Cash Flow in year following listing $500,000

Page 34: North American Exchanges A brief outline to getting started

Toronto Stock ExchangeToronto Stock Exchange

Financial Requirements

Additional Requirements

Financial Requirements

Additional Requirements

Listing Requirements

Foreign Companies

Minimum number of shareholders 3,000

Number of publicly traded shares at the time of issue 1,000,000

Minimum value of these shares $10,000,000

Net Tangible Assets $10,000,000

Earnings from ongoing operations $2,000,000

Page 35: North American Exchanges A brief outline to getting started

Associated FeesListing Fees Range from $15,000 -

$150,000Annual Fees

TSX Group, Investment Dealers, Provincial Securities Commissions, etc…

Associated FeesListing Fees Range from $15,000 -

$150,000Annual Fees

TSX Group, Investment Dealers, Provincial Securities Commissions, etc…

Toronto Stock ExchangeToronto Stock ExchangeAssociated Fees

Page 36: North American Exchanges A brief outline to getting started

TSX Venture ExchangeTSX Venture Exchange

Listing Requirements

Who Should List?Tier 1

Financial RequirementsTier 2

Financial Requirements

Associated Fees

Listing Requirements

Who Should List?Tier 1

Financial RequirementsTier 2

Financial Requirements

Associated Fees

Page 37: North American Exchanges A brief outline to getting started

Who Should List? Tier 1

Reserved for ‘Premier’ junior companiesEmerging CompaniesGoals toward senior status

Tier 2Early Stage junior companiesSeeking access to public venture capital

Who Should List? Tier 1

Reserved for ‘Premier’ junior companiesEmerging CompaniesGoals toward senior status

Tier 2Early Stage junior companiesSeeking access to public venture capital

TSX Venture ExchangeTSX Venture ExchangeListing Requirements

Page 38: North American Exchanges A brief outline to getting started

TSX Venture ExchangeTSX Venture Exchange

Tier 1 – Financial Requirements

Tier 1 – Financial Requirements

Listing Requirements – Tier 1

Minimum number of shareholders 300

Number of publicly traded shares 1,000,000

Minimum Value of these shares $1,000,000

Minimum portion of issued securities held by public 20%

Net Tangible Assets (Dependant upon industry) $1,000,000 - $5,000,000

Earnings from operations (Dependant upon industry) $100,000 - $300,000

Page 39: North American Exchanges A brief outline to getting started

TSX Venture ExchangeTSX Venture Exchange

Tier 2 – Financial Requirements

Tier 2 – Financial Requirements

Listing Requirements – Tier 2

Minimum number of shareholders 300

Number of publicly traded shares 500,000

Minimum Value of these shares $500,000

Minimum portion of issued securities held by public 20%

Net Tangible Assets (Dependant upon industry) $500,000 - $2,000,000

Earnings from operations (Dependant upon industry) $50,000 - $250,000

Page 40: North American Exchanges A brief outline to getting started

Associated FeesListing Fees Range from $5,000 -

$30,000Annual FeesAdditional Fees

Upgrade from tier 2 to tier 1

Associated FeesListing Fees Range from $5,000 -

$30,000Annual FeesAdditional Fees

Upgrade from tier 2 to tier 1

TSX Venture ExchangeTSX Venture ExchangeAssociated Fees

Page 41: North American Exchanges A brief outline to getting started

What is Cross-listingWhat is Cross-listing

Cross listing refers to shares that are officially listed on more than one exchange.

They are traded freely away from their domestic centre.

Cross listing refers to shares that are officially listed on more than one exchange.

They are traded freely away from their domestic centre.

Page 42: North American Exchanges A brief outline to getting started

Advantages of Cross-listingAdvantages of Cross-listing

Reduction in the firm’s riskLower cost of equityHigher returns

Increased Liquidity Increased VisibilityGreater Analyst CoverageBetter investment recognition

Increase potential shareholders Increases US holdings of stock

Reduction in the firm’s riskLower cost of equityHigher returns

Increased Liquidity Increased VisibilityGreater Analyst CoverageBetter investment recognition

Increase potential shareholders Increases US holdings of stock

Page 43: North American Exchanges A brief outline to getting started

Disadvantages of Cross-listingDisadvantages of Cross-listing

Major costs Registration Compliance

Change Accounting Practices Must meet GAAP

Submit Periodic Filings Disclose all information

Major costs Registration Compliance

Change Accounting Practices Must meet GAAP

Submit Periodic Filings Disclose all information

Non-Canadian Firms

Page 44: North American Exchanges A brief outline to getting started

Disadvantages of Cross-listingDisadvantages of Cross-listing

No real disadvantages for Canadian firmsMinimal Reporting to SEC neededMulti-Jurisdictional Disclosure System

(MJDS)

No real disadvantages for Canadian firmsMinimal Reporting to SEC neededMulti-Jurisdictional Disclosure System

(MJDS)

Canadian Firms

Page 45: North American Exchanges A brief outline to getting started

Solutions for Canadian and Foreign firms

Solutions for Canadian and Foreign firms

Canadian FirmsShould Utilize Cross-listingMany AdvantagesFew Disadvantages

Foreign FirmsDo not Cross-listUse ADR’s instead

Do not have to follow any rulesBank takes on all responsibility

Canadian FirmsShould Utilize Cross-listingMany AdvantagesFew Disadvantages

Foreign FirmsDo not Cross-listUse ADR’s instead

Do not have to follow any rulesBank takes on all responsibility

Page 46: North American Exchanges A brief outline to getting started

Where to Cross-listWhere to Cross-list

New York Largest Market (capitalization)Lowest Transaction CostsMost # ADR’sLowest # Cross Listed

LondonEasy and Low cost to listLow reporting requirements

TokyoHigh CommissionsLow Volume (not very Liquid)

New York Largest Market (capitalization)Lowest Transaction CostsMost # ADR’sLowest # Cross Listed

LondonEasy and Low cost to listLow reporting requirements

TokyoHigh CommissionsLow Volume (not very Liquid)

Page 47: North American Exchanges A brief outline to getting started

Thank YouThank You

Any Questions?Any Questions?