Going public, whether for a budding startup or an established company seeking to expand its horizons, is a momentous milestone in the life cycle of any business. But going public on a multi-tiered exchange like the NYSE or Nasdaq is more than just a celebration. It requires precision in complying with complex technical, legal, and corporate governance criteria outlined by the Securities and Exchange Commission (SEC). This article outlines the listing requirements and processes leading up to a public offering that is marketed differently for subsequent sales for both domestic and foreign companies.

I.  Primary Listing Requirements on Major U.S. Exchanges

If a company wants to list its shares on a U.S. stock exchange—like the NYSE or Nasdaq—to access public investors and trade in the open market, it needs to clear two big hurdles:

1. Register with the SEC. This is the U.S. government’s securities watchdog. The company has to file a detailed registration statement that discloses everything investors need to know: financials, risks, business model, and more. This process is designed to protect investors and make sure the market has accurate, up-to-date information.
2. Get Accepted by the Exchange. Each stock exchange sets its own minimum standards to decide whether a company is eligible to list. These standards are meant to filter for size, stability, and market interest.

NYSE Listing Requirements

The NYSE (New York Stock Exchange) sets slightly different rules for U.S. companies and foreign companies.

For U.S. Companies

The company must show it has a strong base of investors and some meaningful financial size:

• At least 400 U.S. shareholders, each holding 100+ shares
• At least 1.1 million shares held by the public (i.e., not insiders or controlling shareholders)
• Those shares must have a market value of at least $40 million
• The stock price must be at least $4 per share
• Financially, the company must pass one of two tests:
  • Earnings test (based on recent profits), or
  • Global market capitalization test (based on total company value)

For Non-U.S. Companies (Foreign Private Issuers or FPIs)

The NYSE adjusts its criteria to account for global shareholder bases:

• 5,000 shareholders worldwide, each holding 100+ shares
• 2.5 million shares publicly held worldwide
• Market value of those shares must be at least $100 million (or $60 million in some special cases)
• Must meet one of four financial standards, each tailored to different business types (e.g., earnings-based, valuation-based, or based on affiliation with another NYSE-listed company)

Direct Listings on NYSE

A company can also go public without an IPO—this is called a direct listing. To do this, the company must:

• Sell at least $100 million of its own shares in the opening auction on the first trading day, or
• Show that the combined value of the shares it plans to sell and the ones already held by the public totals at least $250 million

Nasdaq Listing Requirements

Nasdaq has three separate market tiers—each with its own standards. From most to least rigorous:

1. Global Select Market – for large, established companies.
2. Global Market – for mid-sized companies.
3. Capital Market – for smaller or growth-stage companies.

Each tier has a slightly different mix of requirements, but all focus on the same key areas:

• Public float (number and value of shares held by public investors).
• Number of shareholders, usually 300–450 minimum.
• Minimum share price, typically $4 per share.
• Financial strength, measured through income, revenue, assets, or equity.
• Trading history, especially for companies that were previously private or traded over-the-counter.

Direct Listings on Nasdaq

Nasdaq allows direct listings too—but only on its Global Select tier. To qualify, a company must:

• Have at least $110 million in market value of freely tradable shares (or $100 million if it has $110 million in stockholders’ equity).

II.  What Are Qualitative Listing Standards?

When a company wants to be listed on a major U.S. stock exchange, it’s not enough to meet certain financial benchmarks mentioned above. The company also has to prove that it has the right internal structures in place to be publicly accountable. This is what called qualitative listing standards.

These standards focus on how a company is governed: who’s overseeing it, how transparently it communicates with investors, and whether its leadership is subject to independent oversight.

Corporate Governance: Independence and Oversight

One of the first things the exchanges look at is whether a company has a board of directors that is not dominated by insiders. Most of the board should be independent—meaning the individuals have no meaningful ties to the company or its executives that could cloud their judgment.

Two committees must always be composed entirely of independent directors:

• An audit committee, which oversees the accuracy of the company’s financial reporting and liaises with external auditors.
• A compensation committee, which sets executive pay and ensures that it’s tied to performance, not favoritism or personal ties.

These committees play a real role in guarding against fraud, excessive risk-taking, and conflicts of interest.

In the case of the NYSE, there’s a third required committee focused on nominations and governance, also made up entirely of independent directors. Nasdaq offers more flexibility on this point, allowing companies to assign these responsibilities to a group of independent directors even without a formal committee.

Another important governance feature is the requirement that independent directors regularly meet without management present. These private meetings—sometimes called executive sessions—give the board a chance to candidly evaluate company leadership and raise concerns, if needed, without pressure.

Ongoing Disclosure: Keeping Investors Informed

Once a company is listed, it has to keep the public informed—not just once a year, but continuously. This means publishing annual reports and interim (typically quarterly) financial statements that comply with both SEC rules and stock exchange standards.

In addition to these regular reports, companies are expected to immediately disclose major developments that could affect their stock price—things like mergers, executive departures, investigations, or big shifts in strategy. These updates typically come through filings like Form 8-K, and they’re a critical part of how markets function fairly.

Companies are also required to adopt a Code of Conduct or Code of Ethics that outlines expectations for ethical behavior, legal compliance, and integrity in financial reporting. This code must apply to directors, officers, and employees, and must be disclosed to investors.

What About Foreign Companies?

The U.S. stock markets are global, and many companies that list on the NYSE or Nasdaq are based overseas. These foreign private issuers (FPIs) are allowed some flexibility in how they meet governance standards.

Rather than forcing them to fully adopt U.S. governance rules, the exchanges let FPIs follow the corporate governance practices of their home countries—if they clearly explain to investors how those practices differ from U.S. standards.

So, for example, if a European company doesn’t have a separate compensation committee (because its local laws don’t require one), it can still list in the U.S.—as long as it discloses that difference and explains how compensation decisions are made instead.

III.  Secondary Listings and Follow-On Offerings in the U.S. Markets

Once a company completes its initial public offering (IPO), its journey as a public company is just beginning. Over time, it may need to raise additional capital to fund growth, refinance debt, or pursue strategic opportunities. This is where follow-on offerings—sometimes called secondary offerings—come into play. These offerings involve the public sale of shares after the IPO and are governed by a well-established regulatory framework in the U.S. overseen by the SEC.

What Are Follow-On Offerings?

A follow-on offering is a way for a company to return to the public markets and sell shares after its initial listing. These offerings can involve:

• Primary shares, which are newly issued by the company to raise fresh capital.
• Secondary shares, which are sold by existing shareholders (such as early investors, founders, or insiders) who are liquidating part of their holdings.
• Or a combination of both.

Follow-on offerings can be large and high-profile (as with major tech companies raising billions post-IPO) or more modest, depending on the company’s capital needs and market appetite.

While often associated with U.S. domestic companies, foreign private issuers also use this route to expand their investor base or fund U.S.-based operations—typically after completing a primary listing via American Depositary Receipts (ADRs) or direct share offerings.

Key SEC Forms: Form S-1 vs. Form S-3

To conduct a follow-on offering, a company must file a registration statement with the SEC. This ensures that investors have access to current, accurate, and complete information about the company and the securities being offered.

There are two main types of forms used for this purpose:

1. Form S-1 is the full-length registration statement used for IPOs and for follow-on offerings by companies that do not yet qualify to use the shorter Form S-3. It requires extensive disclosures, including detailed financial statements, risk factors, management discussion and analysis, executive compensation, and business operations—following Regulation S-K Form S-1 is also the default form for companies making their first foray into the U.S. public markets, and for younger or smaller public companies that haven’t yet built a filing track record with the SEC.

2. Form S-3 is a short-form registration that allows companies to streamline the process by incorporating by reference previously filed SEC reports (like 10-Ks, 10-Qs, and 8-Ks), rather than repeating information already made public. This makes Form S-3 faster and more efficient for follow-on offerings. Even better, it can be used as a “shelf registration”, meaning the company can register a large block of securities once and then issue them incrementally over time—taking advantage of favorable market conditions without having to re-file each time.

Who Can Use Form S-3?

The SEC imposes specific criteria to ensure that only established, compliant companies use this streamlined form. To qualify:

1. The company must be a U.S. domestic issuer (foreign private issuers must use Form F-3 instead).
2. It must have a class of securities already registered under the Exchange Act (typically as a result of an IPO or direct listing).
3. It must have filed all required SEC reports on time for the previous 12 months—this shows a track record of compliance.
4. It must have no defaults on material debt or long-term leases.
5. It must not have missed any dividend payments on preferred stock since its most recent fiscal year.

Finally, the company’s public float—the market value of its publicly traded shares held by non-affiliates—determines how much it can raise using Form S-3:

• If the float is $75 million or more, the company can generally use Form S-3 to register any size offering of equity or debt.
• If the float is below $75 million, the company can still use Form S-3 for limited offerings, but only under specific conditions:
  • For secondary offerings (i.e., by existing shareholders), there are fewer restrictions.
  • For primary offerings (i.e., by the company), they must relate to non-convertible securities and the company must meet one of several alternative criteria—such as having issued $1 billion in debt over the past three years, or being a wholly-owned subsidiary of a well-known seasoned issuer.

IV.  Domestic vs. Foreign Companies: How Listing in the U.S. Works

Going public on a U.S. stock exchange is a major step for any company. Whether the goal is to access deep pools of capital, raise the company’s global profile, or provide liquidity for early investors, listing in the U.S. comes with both prestige and regulatory obligations. But the path to listing depends in part on where the company is based.

While the core process is similar for all companies, U.S. domestic issuers and foreign private issuers (FPIs) often take slightly different routes—especially when it comes to disclosure formats and share structures.

The Primary Listing Process

At the most basic level, a company must register its securities with the SEC before they can be publicly traded on a U.S. exchange. This process involves filing a registration statement—a legal and financial disclosure package that lays out everything investors need to know.

The registration statement consists of two parts:

• A prospectus, which is the formal document provided to investors that describes the company’s business, financial performance, risks, and use of proceeds.
• A set of exhibits, which includes additional legal, financial, and organizational documents filed with the SEC but not necessarily shared with the public in marketing materials.

Once submitted, the SEC reviews the filing and provides comments. The company responds, and once the SEC is satisfied, it declares the registration effective. Only then can the shares be sold or listed for trading.

Importantly, a listing doesn’t always require a public offering. A company can go public through a direct listing, where no new capital is raised. Instead, existing shareholders are simply allowed to sell their shares on the open market. Direct listings have become more common in recent years—especially for high-profile tech companies—and are now permitted on both the NYSE and Nasdaq under certain conditions.

Foreign Companies

For companies based outside the U.S., the listing process follows the same basic legal and regulatory structure—but with some important differences designed to accommodate international practices.

Foreign Private Issuers (FPIs)—a category under U.S. securities law that includes non-U.S. companies with limited U.S. shareholder or management presence—can list either their actual shares or American Depositary Receipts (ADRs). The choice between the two depends on a mix of regulatory, strategic, and market considerations.

An ADR is essentially a proxy for a foreign share. It’s a negotiable certificate issued by a U.S. bank, representing one or more shares of the foreign company. These certificates are traded just like U.S. stocks and offer U.S. investors a convenient way to invest in foreign companies without dealing with foreign exchanges, currencies, or settlement systems.

ADRs are often favored by FPIs because they:

• Simplify cross-border trading logistics.
• May be more familiar to U.S. retail and institutional investors.
• Can enhance visibility in the U.S. without requiring full corporate restructuring or duplicative financial reporting.

On the other hand, direct listings of foreign shares (without ADRs) are sometimes used when the issuer wants tighter integration with its global shareholder base or is already well-known among U.S. investors.

The decision to use ADRs versus direct shares typically comes down to cost, complexity, investor perception, and the company’s long-term capital markets strategy.

Secondary Listings: Follow-On Options for FPIs

Just like U.S. companies, foreign issuers that have already gone public may later decide to raise more capital or allow insiders to sell—through what’s known as a follow-on offering.

In these cases, the company generally files a Form F-1, which is the foreign counterpart to the Form S-1 used by domestic issuers. It’s a full disclosure document that includes detailed financials, risk factors, business operations, and governance practices, all in compliance with U.S. regulations.

The FPI may again choose to structure the offering using ADRs or its underlying ordinary shares, depending on which structure it used for its primary listing and what best suits the strategy for the secondary raise.