How does a company switch from one stock exchange to another?

By Daniel Kurt AAA
A:

A publicly traded company can, in fact, switch to a stock exchange that it believes will be favorable to its financing efforts. However, the company must first meet the new exchange's financial and regulatory requirements.

For example, the New York Stock Exchange requires newly listed companies to have 1.1 million publicly held shares, which must be held by a minimum of 2,200 shareholders. By contrast, the Nasdaq electronic exchange requires 1.25 million public shares held by at least 550 shareholders. These exchanges also have requirements for trading price, corporate profits and trading volume.

The company must first fill out an application and provide various financial statements verifying that it meets these standards. If accepted, the organization typically has to provide written notice to its previous exchange indicating its intention to voluntarily delist. The exchange may require the company to issue a press release notifying shareholders about this decision.

There are a variety of reasons why a company may want to transfer to a different exchange. Given its size, companies that meet the requirements of the New York Stock Exchange sometimes move their stock there for the increased visibility and liquidity that it offers. A company listed on several exchanges around the world may choose to delist from one or more in order to curb costs and focus on its biggest investors. In some cases, firms have to involuntarily move to a different exchange when they no longer meet the financial or regulatory requirements of their current exchange. If a U.S. stock doesn't meet the standards of the NYSE or Nasdaq, for example, it may have to sell securities over the counter.

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