The credibility and relative safety of trading stocks and securities lies in the listing requirements a stock exchange establishes. It is important for investors to know that securities listed on a regulated American stock exchange receive rigorous investigation from the exchange and the Securities and Exchange Commission (SEC) before being listed and subsequently traded in the public arena. The National Association of Securities Dealers Automated Quotations (NASDAQ), is one such regulated stock exchange.
What Are Listed Securities
Securities are investment products such as stocks, bonds and commodities. Listed securities are securities that have been accepted for public trading on a licensed and regulated securities exchange. Listed securities may also be known as a quoted security or a listed investment. Listed investments found on American stock exchanges are usually registered with the U.S. Securities and Exchange Commission before being accepted by the trading exchange.
Unlisted securities are investment products such as corporate bonds, derivatives, equity and government securities and are traded in Over the Counter (OTC) markets. OTC markets are regulated by the Financial Industry Regulatory Authority (FINRA). OTC markets consist of investment products that may not qualify for listing on regulated securities exchanges and promote a negotiated trade as opposed to an auction style trade. Unlisted securities may be required to file financial statements with the SEC on a quarterly basis to be listed for trading on an OTC.
What is NASDAQ
The NASDAQ is licensed through the SEC as an American securities exchange. The NASDAQ trades in stocks, bonds and other securities using an electronic, automated system and, according to information found in the Library of Congress, is known as the very first such electronic securities exchange. Securities listed on the NASDAQ must be registered with the SEC, meet requirements the NASDAQ places on capital, assets, shareholders and public shares, have three or more market makers (financial companies acting as dealers or brokers for the company's securities) and pay a fee dependent upon the number of shares being offered.
Listed Securities On NASDAQ
NASDAQ trades listed securities that have passed both quantitative and qualitative requirements set out by NASDAQ. There are three separate markets within the NASDAQ exchange where a security can be listed: NASDAQ Capital Market, NASDAQ Global Select and NASDAQ Global Market. Each NASDAQ market has its own listing requirements.
The International Securities Exchange, the New York Stock Exchange and the American Stock Exchange are other American stock exchanges where listed securities are found. A security's listing requirements will vary between exchanges.
- Library of Congress: Business Reference Services; History of the American and NASDAQ Stock Exchanges; Ellen Terrell; September 2006
- Edward Jones: Investment Terms
- NASDAQ OMX: Listing Standards and Fees
- Securities and Exchange Commission: Over the Counter Market
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Alex Burke holds a degree in environmental design and a Master of Arts in information management. She's worked as a licensed interior designer, artist, database administrator and nightclub manager. A perpetual student, Burke writes Web content on a variety of topics, including art, interior design, database design, culture, health and business.