SEC Approves BX Venture Market


On May 12, 2011 the NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) announced SEC approval of its BX Venture Market. This new listing market will provide companies that would not otherwise qualify for an exchange listing in the United States the opportunity to list and trade their shares in a well regulated and transparent environment. For companies already trading in the over-the-counter markets contemplating an initial exchange listing, or those delisted from a national securities exchange, the BX Venture Market will provide a new, well-regulated listing alternative. Listing standards for this market will require companies to comply with many of the same corporate governance requirements as are required for listing on other securities exchanges and maintain basic quantitative standards. Trading will be available on NASDAQ OMX’s INET platform. The BX Venture Market is expected to launch later this year.

Summary of Listing Criteria:

Companies that list on the BX Venture Market will likely be smaller companies that nonetheless need to meet significant qualitative listing requirements. Requirements include:

  • three independent directors
  • fully independent audit committee
  • independent director oversight of executive compensation
  • review of related party transactions by independent directors
  • shareholder approval of equity compensation
  • annual shareholder meetings
  • a code of conduct applicable to all directors, officers and employees

In addition, companies will be required to meet quantitative requirements, designed to assure sufficient liquidity, including:

  • a minimum initial listing price of $0.25 for companies previously listed on a national securities exchange and $1.00 for companies previously quoted in the over-the-counter market would apply. The BX Venture Market will initiate delisting proceedings if a security fails to meet a minimum bid price of at least $0.25 for 20 consecutive days
  • 200,000 publicly held shares for initial and continued listing
  • 200 shareholders, at least 100 of which must be round-lot holders for initial listing and 200 shareholders for continued listing
  • $2 million market value of listed securities for initial listing and $1 million for continued listing
  • two registered and active market makers for initial and continued listing

Finally, for companies not previously listed on a national securities exchange, initial listing will require that the company evidence either $1 million in stockholders’ equity or $5 million in total assets, one year of operating history, and a plan to maintain sufficient working capital for twelve months after listing.