NASDAQ GAINS APPROVAL FOR BX VENTURE MARKET FOR SMALLER COMPANIES
The U.S. Securities and Exchange Commission recently approved the application of The NASDAQ
OMX Group, Inc. to launch its new listing market, to be known as the BX Venture Market. The BX
Venture Market will provide companies that do not otherwise qualify for an exchange listing –
including companies that have been delisted from another market for failure to satisfy that market’s
listing standards and companies that want to take a first step toward an exchange listing – with an
opportunity to list and trade their securities in an environment that is designed to provide greater
transparency, regulation and liquidity than the over-the-counter markets. NASDAQ expects to begin
accepting listing applications during the third quarter of 2011, and to launch the BX Venture Market
by the end of the year.
To be eligible for an initial listing on the BX Venture Market, an issuer must meet the following
minimum quantitative standards:
Previously Listed on U.S.
Not Listed on U.S.
Public Float 200,000 shares 200,000 shares
Public Shareholders 200 total, 100 round lot 200 total, 100 round lot
Market Value of Listed Securities $2 million $2 million
Market Makers 2 2
Bid Price $0.25 $1.00
In addition, prior to obtaining a listing on the BX Venture Market, a company not previously listed on
a national securities exchange must have: (i) either $1 million in stockholders’ equity or $5 million in
total assets; (ii) a one year operating history (which limits the ability of shell companies to qualify for
listing); and (iii) a plan to maintain sufficient working capital for at least 12 months after listing.
Once listed on the BX Venture Market, a company must satisfy the following quantitative continued
Public Float 200,000 shares
Public Shareholders 200 total
Market Value of Listed Securities $1 million
Market Makers 2
Bid Price $0.25
1 Prior to September 30, 2011, any company delisted from a national exchange since January 1, 2010 would be eligible for
this standard. After launch, a company would have three months to list on the BX Venture Market after being delisted.
June 2011 By: Michael T. Campoli
The BX Venture Market will also have qualitative listing standards that are comparable to those of The
NASDAQ Stock Market and the other national securities exchanges, but that are targeted to smaller
and earlier stage companies. For example, the listed class of securities must be registered under
Section 12(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), the company must be
current in its Exchange Act filings, the company must have an independent audit committee,
compensation decisions for executive officers must be made or recommended by independent
directors, the company must hold an annual meeting of shareholders, and the company must comply
with the applicable provisions of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and
Consumer Protection Act.
However, companies listed on the BX Venture Market will not be subject to certain requirements
generally associated with a listing on a national securities exchange, including the requirement to have
a majority independent board and the requirement to obtain shareholder approval in connection with
certain issuances of common stock (including issuances generally covered by the so-called “20%
Rule”). In addition, securities listed on the BX Venture Market will not be exempt from state blue-sky
requirements or the penny stock rules.
The foregoing is merely a discussion and is intended to provide a brief summary of the BX Venture Market. If you would
like to learn more about this topic or how Pryor Cashman LLP can serve your legal needs, please contact Michael T.
Campoli, Esq. at 212-326-0468, email@example.com, or the Pryor Cashman LLP attorney with whom you work.
Copyright © 2011 by Pryor Cashman LLP. This Legal Update is provided for informational purposes only and does not
constitute legal advice or the creation of an attorney-client relationship. While all efforts have been made to ensure the
accuracy of the contents, Pryor Cashman LLP does not guarantee such accuracy and cannot be held responsible for any
errors in or reliance upon this information. This material may constitute attorney advertising. Prior results do not
guarantee a similar outcome.
ABOUT THE AUTHOR
MICHAEL T. CAMPOLI
Direct Tel: 212-326-0468
Direct Fax: 212-798-6361
Michael Campoli devotes his practice to counseling public and private companies on a broad range of
corporate matters, including securities law compliance, corporate formation and governance, mergers
and acquisitions, public and private debt and equity financing transactions, and limited liability
company and partnership counseling.
Mr. Campoli's work at Pryor Cashman has included the representation of:
• Marina Biotech, Inc. (NASDAQ: MRNA) as outside general counsel in connection with its
equity and debt financings, M&A initiatives and compliance with SEC reporting requirements
• Javelin Pharmaceuticals, Inc. (NYSE Amex: JAV) as outside general counsel in connection
with its equity financings and compliance with the reporting requirements of the SEC and other
• Henry Schein, Inc. (NASDAQ: HSIC) in connection with the acquisition of various private
companies in the medical equipment and software industries
• Cowen and Company, LLC, Rodman & Renshaw, LLC and Global Hunter Securities, LLC in
connection with various underwritten public offerings for domestic and foreign issuers
• Briad Restaurant Group in its prevailing tender offer for Main Street Restaurant Group, Inc.,
the largest T.G.I. Friday’s franchisee
• The Kushner Companies in connection with its acquisition of the office building located at 666
Fifth Avenue, New York, New York
• A private telecommunications company in connection with the issuance of a $260 million
secured note to the Rural Utilities Service of the U.S. Department of Agriculture and the
concurrent placement of $110 million of preferred stock to venture capital investors
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