Stock exchanges explained: NYSE, Nasdaq tiers, OTC and delisting
US stocks trade on exchanges like the NYSE and Nasdaq or over the counter. Learn the Nasdaq tiers, the $1 minimum bid rule, deficiency notices and how delisting works.
In brief
- Most US stocks are listed on the NYSE, NYSE American or one of Nasdaq's three tiers (Global Select Market, Global Market and Capital Market), while unlisted stocks trade over the counter.
- Both Nasdaq and the NYSE generally start a deficiency process when a stock trades below $1.00 for 30 consecutive business or trading days, then give the company about 180 days or 6 months to regain compliance.
- A company that receives a listing deficiency notice must disclose it on Form 8-K under Item 3.01 within 4 business days.
- Rules adopted in 2024 and 2025 limit repeated reverse splits, so a company that already did a reverse split in the past year can face delisting without a new compliance period.
A stock exchange is a regulated marketplace that lists company shares and sets the rules those companies must follow to stay listed. In the US, most public companies are listed on the New York Stock Exchange (NYSE), NYSE American, or one of Nasdaq's three market tiers. Stocks that are not listed on a national exchange trade over the counter (OTC). Where a stock is listed affects its liquidity, its disclosure obligations and, when a company runs into trouble, how and when it can be delisted.
What does it mean for a stock to be listed?
A listed stock has met an exchange's initial listing standards for size, share price, public float, number of holders and corporate governance, and has agreed to meet ongoing (continued) listing standards. Listing is different from where trades happen. A Nasdaq-listed stock trades on many venues, including other exchanges and off-exchange venues, but the listing exchange sets its listing rules, runs its opening and closing auctions, and issues regulatory halts.
All national securities exchanges are registered with and overseen by the SEC. Companies listed on them must register their shares under the Securities Exchange Act and file periodic reports (10-K, 10-Q, 8-K) on EDGAR.
The main US listing venues
| Venue | Typical companies | Notes |
|---|---|---|
| NYSE | Large, established companies | Uses Designated Market Makers and an opening and closing auction |
| NYSE American | Small caps | Formerly the American Stock Exchange |
| NYSE Arca | Mostly ETFs and other exchange-traded products | Few operating companies |
| Nasdaq Global Select Market | Largest Nasdaq companies | Highest Nasdaq initial standards |
| Nasdaq Global Market | Mid-sized companies | Middle tier |
| Nasdaq Capital Market | Smaller companies | Lowest Nasdaq standards, many small biotech and recent IPOs |
| Cboe BZX | Mostly ETFs | Lists some operating companies |
| OTC Markets (OTCQX, OTCQB, Pink) | Unlisted companies, foreign ADRs, delisted stocks | Not a national securities exchange |
What are the Nasdaq tiers?
Nasdaq divides its listed companies into three tiers. The Global Select Market has the strictest initial requirements for earnings, cash flow or market capitalization. The Global Market sits in the middle. The Capital Market has the lowest thresholds and is where many small companies and early-stage biotechs list. Companies can move between tiers, and a company that falls out of compliance on a higher tier can sometimes transfer down to the Capital Market instead of being delisted.
What is OTC trading?
OTC stocks trade through broker-dealer networks rather than on an exchange. OTC Markets Group organizes them into tiers: OTCQX (highest standards, often foreign companies and larger issuers), OTCQB (venture-stage companies that must be current in reporting and meet a minimum bid test), and Pink (wide range, including companies with limited disclosure). The Expert Market is a restricted tier for securities without current public information, where quotes are not publicly displayed. Liquidity in many OTC stocks is thin, and spreads can be wide. The SEC's investor site explains microcap stock risks at https://www.investor.gov/introduction-investing/investing-basics/glossary/microcap-stock.
Continued listing standards that trigger notices
Once listed, companies must keep meeting continued listing standards. The most common deficiencies:
| Deficiency | Nasdaq | NYSE |
|---|---|---|
| Low share price | Closing bid below $1.00 for 30 consecutive business days | Average closing price below $1.00 over 30 consecutive trading days |
| Standard cure period for price | 180 calendar days, with a possible second 180 days for Capital Market companies | 6 months |
| How price compliance is regained | Closing bid at $1.00 or more for at least 10 consecutive business days | Closing price and 30-trading-day average at $1.00 or more at a month end |
| Late periodic report | Notice after a missed 10-K or 10-Q, plan required within 60 days, possible exception up to 180 days from the due date | Notice and a cure period, up to 6 months initially |
| Equity or market value | Minimum stockholders' equity or alternatives (for example $2.5 million equity on the Capital Market) | Market capitalization and equity tests |
| Governance | Audit committee and board independence requirements | Similar requirements |
These are summaries. The exchanges' full rules are in the Nasdaq Listing Rules (5000 series) and the NYSE Listed Company Manual (Section 802.01).
What is a deficiency notice?
A deficiency notice is a letter from the exchange telling a company it no longer meets a continued listing standard and explaining how long it has to fix the problem. Under SEC rules, the company must file a Form 8-K under Item 3.01 (Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard) within 4 business days. Nasdaq also requires a public announcement. Receiving a notice does not mean immediate delisting; the stock keeps trading during the compliance period.
Reverse splits and the newer, stricter rules
The most common fix for a low share price is a reverse stock split, which combines shares (for example 1-for-10) to lift the per-share price. Because some companies used repeated reverse splits to stay listed, both exchanges tightened their rules:
- Nasdaq (changes adopted from 2020 through early 2025). A company that falls below $1.00 within one year after a reverse split is not eligible for a compliance period. A company that does not regain compliance after its compliance periods is suspended from trading while any appeal is heard. Separately, if a stock closes at or below $0.10 for 10 consecutive trading days during a compliance period, Nasdaq issues a delisting determination.
- NYSE (2025 change). A company that did a reverse split in the prior year, or reverse splits totaling 200-to-1 or more over two years, is not eligible for a compliance period, and the NYSE begins suspension and delisting procedures immediately.
For more on reverse splits as corporate actions, see stock splits and corporate actions.
How delisting works
Delisting can be involuntary (the exchange removes a company that fails its standards) or voluntary (the company chooses to leave, often after a merger, going private, or moving to another exchange).
The usual involuntary sequence:
- Deficiency notice, disclosed on 8-K Item 3.01.
- Compliance period, during which the company may submit a plan, do a reverse split, raise equity, or catch up on filings.
- Delisting determination if the deficiency is not cured.
- Appeal to a hearings panel, which may grant more time. Nasdaq suspends trading during some appeals under its newer rules.
- Suspension of trading on the exchange. The stock typically starts trading OTC, often the next day.
- Form 25 filed with the SEC, removing the security from listing. It generally becomes effective 10 days after filing.
Delisting from an exchange does not by itself end SEC reporting. A company may keep filing 10-Ks and 10-Qs while trading OTC, unless it also deregisters, usually by filing a Form 15 when it has few enough holders of record.
For shareholders, involuntary delisting usually means lower liquidity and wider spreads, and some institutional holders must sell because their mandates require exchange-listed stocks.
Worked example: a hypothetical deficiency timeline
Acme Corp (ticker ACME), listed on the Nasdaq Capital Market, closes below $1.00 for 30 straight business days.
| Date | Event |
|---|---|
| Feb 10 | Nasdaq sends a bid price deficiency letter with 180 calendar days to regain compliance |
| Feb 13 | Acme files an 8-K under Item 3.01 and issues a press release |
| Feb to Aug | Stock trades between $0.55 and $0.90 |
| Early Aug | 180 days end. Acme meets the other Capital Market standards and says it will do a reverse split if needed, so Nasdaq grants a second 180-day period |
| Following Jan | Acme does a 1-for-15 reverse split. Shares open around $9.75 |
| Late Jan | Stock closes above $1.00 for 10 straight business days. Nasdaq confirms compliance |
Under the newer rules, if ACME then fell below $1.00 again within one year of that reverse split, it would not get a new compliance period, and Nasdaq would issue a delisting determination. Many companies also pair reverse splits with capital raises, so the reverse split is often followed by a prospectus supplement. See shelf offerings and dilution.
How to follow exchanges and listing news on Quantisnow
- The exchanges page shows listed companies by exchange, and companies lets you browse the full universe.
- The 8-K category includes Item 3.01 deficiency and delisting notices, and the SEC filings feed streams them as they are filed.
- Company pages at the pattern /company/ACME show listing details and recent filings. See company pages.
- Set alerts on holdings to catch deficiency notices, reverse split announcements and Form 25 filings.
FAQ
What is the difference between NYSE and Nasdaq?
Both are SEC-registered national securities exchanges that list US stocks. The NYSE uses Designated Market Makers and a single listing tier for most operating companies, while Nasdaq is a fully electronic market with three listing tiers: Global Select, Global Market and Capital Market.
What happens if a stock trades below $1?
If a stock stays below $1.00 for 30 consecutive business days on Nasdaq, or averages below $1.00 over 30 trading days on the NYSE, the exchange sends a deficiency notice. The company typically gets 180 days (Nasdaq) or 6 months (NYSE) to regain compliance, often through a reverse split.
What does a Nasdaq deficiency notice mean?
It means the company no longer meets a continued listing standard, such as the $1.00 minimum bid or timely filing of reports. The company must disclose it on Form 8-K Item 3.01 within 4 business days, and the stock continues to trade during the compliance period.
What happens to my shares if a stock is delisted?
You still own the shares. After delisting from an exchange, the stock usually trades over the counter, where liquidity is often lower and bid-ask spreads wider.
What is the Nasdaq Capital Market?
The Nasdaq Capital Market is Nasdaq's tier for smaller companies, with the lowest initial and continued listing requirements of its three tiers. Many small-cap and early-stage biotech companies list there.
What is Form 25?
Form 25 is the SEC filing used to remove a security from listing on a national exchange. It is filed by the exchange for involuntary delistings or by the company for voluntary ones, and generally becomes effective 10 days after filing.