Capital Markets

Nasdaq Plans Tier for Biggest Blue Chips

The new segment will have higher financial and liquidity requirements for public companies than those of any other market.
Stephen TaubFebruary 15, 2006

The Nasdaq Stock Market has stepped up its efforts to secure the listings of the largest companies, even if they are currently listed on the New York Stock Exchange.

In the first such change in its listing standards in its 35-year history, Nasdaq plans to create a third market tier, dubbed Global Select, that will have financial and liquidity requirements for public companies that are higher than those of any other market.

Currently more than 1,000 of the 3,200 companies that currently trade on Nasdaq qualify for the new tier. Under the plan, all members of the Nasdaq-100 would automatically qualify for Global Select.

The new tier would require companies to have at least 550 shareholders, compared with 500 on the Big Board and 400 for Nasdaq’s current main market, according to The Wall Street Journal.

Companies that don’t qualify for the Select tier will become part of what will be called Nasdaq Global Market (the new name for the Nasdaq National Market) or the Nasdaq Capital Market (formerly the Nasdaq Small Cap Market). Under the new structure, Nasdaq estimates that about 1,650 companies will meet the standards for the Global Market and that 550 companies will qualify for the Capital Market.

Nasdaq expects to implement the new tier on July 1. “We have created a blue-chip market for blue-chip companies,” said Bob Greifeld, Nasdaq president and chief executive officer.

Greifeld is hoping, of course, that the biggest blue-chip companies will migrate to the exchange, which until now specialized in tech and fledgling companies.