Bass Berry’s Kevin Douglas & Toyin Edogun recently blogged about considerations for IPO companies when considering whether to list on Nasdaq or the NYSE.  In case you’re ever asked to jump on a Zoom call to discuss this topic, this excerpt will provide you with a handy cheat sheet for summarizing the differences between the two exchanges:

– The NYSE functions as an auction market in which participants transact directly with each other, whereas market participants on the Nasdaq make purchases and sales via a market maker.

– Nasdaq’s annual listing fees are generally more favorable to listed companies than the NYSE’s listing fees. For example, the current maximum annual listing fee for companies listed on the NYSE is $500,000, compared to a maximum annual listing fee for companies listed on Nasdaq of $193,000. Additionally, while the NYSE imposes a fee to list additional shares, Nasdaq does not charge a fee for the listing of additional shares.

– Companies listed on Nasdaq have the ability to participate in certain widely-recognized Nasdaq-specific indices, including the Nasdaq-100 Index (which includes 100 of the largest non-financial companies listed on the Nasdaq), which do not have an NYSE equivalent. The inclusion of companies in such recognized indices may increase the visibility and potential trading volume of companies included in any such index.

– While the corporate governance requirements of each exchange are quite similar, there are certain differences between these corporate governance requirements, with the Nasdaq’s requirements being slightly less stringent on balance.

The blog also reviews the comparative performance of the two exchanges over the past couple of years in attracting new IPO candidates, and also discusses recent moves from one exchange to the other by existing public companies.

– John Jenkins