Securities Law, NYSE, NASDAQ & OTC Markets Listings & Compliance

Uplisting from OTC Markets to Nasdaq or NYSE

Uplisting from the OTC Markets to Nasdaq or NYSE American represents a pivotal transition for emerging companies seeking greater liquidity, institutional visibility, and enhanced credibility. This expanded guide outlines the financial, governance, and regulatory requirements — including SEC registration, FINRA Rule 6490 compliance, PCAOB audit standards, and market readiness — that issuers must meet to successfully uplist.

Why Uplist? Strategic Benefits vs. Real-World Hurdles

Moving from OTCQB, OTCQX, or OTCID to a national exchange expands institutional access, attracts analyst coverage, and can reduce the cost of capital. It also imposes rigorous corporate governance, minimum bid price requirements, and shareholder-distribution standards. National exchanges offer several advantages, including increased credibility, eligibility for inclusion in ETFs, greater liquidity, and access to institutional trading platforms.

Choosing Your Venue: Nasdaq vs. NYSE vs. NYSE American

Selecting the right exchange depends on a company’s capitalization, shareholder base, and growth trajectory.

Nasdaq Listing Standards

NYSE and NYSE American Listing Standards

NYSE Main Board: Pre-tax Earnings ≥ $10M over 3 years; Global Market Cap ≥ $100M; Public Float ≥ 1.1M shares valued ≥ $40M; ≥400 round-lot holders; Share Price ≥ $4.

NYSE American: Stockholders’ Equity ≥ $4–6M; Market Cap ≥ $50M; Public Float ≥ 500,000 shares valued ≥ $3M; ≥400 holders; Bid Price ≥ $2.

Governance, Committees, and Independence

Robust corporate governance is central to uplisting eligibility. Both exchanges require adherence to SEC Regulation S-K Items 407 and exchange-specific rules.

Nasdaq Corporate Governance Requirements

• Majority Independent Directors (Rule 5605(b)(1))
• Independent Audit Committee (Rule 5605(c))
• Independent Compensation Committee (Rule 5605(d))
• Independent Nomination Committee (Rule 5605(e))
• Code of Conduct/Ethics (Rule 5610)
• Shareholder Meetings & Voting Rights (Rule 5620)

NYSE Corporate Governance Requirements

• Majority Independent Board (§303A.01)
• Independent Audit Committee (§303A.07)
• Independent Compensation Committee (§303A.05)
• Nominating/Governance Committee (§303A.04)
• Corporate Governance Guidelines & Code of Conduct (§303A.09–.10)
• Annual CEO Certification (§303A.12)

Financial Reporting, PCAOB Audit, and Internal Controls

Issuers must present PCAOB-audited financial statements, maintain internal controls, and comply with Sarbanes-Oxley §404. Key areas: revenue recognition (ASC 606), related-party transactions (Item 404), equity accounting, and timely filings (10-K, 10-Q, 8-K).

SEC Registration for Exchange Trading — Form 8-A

A company must register under Section 12(b) of the Exchange Act using Form 8-A to list on a national exchange. This may accompany or follow an S-1 registration statement.

Corporate Actions and FINRA Rule 6490

Corporate actions (reverse splits, name/symbol changes) require FINRA notice under Rule 6490. FINRA reviews resolutions, transfer agent verifications, and legal opinions.

Price Support, Liquidity, and Shareholder Distribution

Nasdaq Capital Market: $4 minimum bid; ≥300 holders; MVPHS ≥ $15M. NYSE American: $2 bid; ≥400 holders; float value ≥ $3M. NYSE Main Board: $4 bid; ≥400 holders; float value ≥ $40M.

Uplisting Readiness Checklist (Expanded)

Corporate & Governance Readiness:

• Establish a majority independent board and committees.
• Adopt ethics, whistleblower, and related-party policies.
• Maintain D&O insurance and certifications.

Financial and SEC Compliance:

• Verify PCAOB audits for two years.
• File timely Exchange Act reports.
• File Form 8-A.
• Review internal controls (SOX §404).

Market Readiness:

• Meet bid price and float tests.
• Eliminate toxic financing.
• Confirm DTC eligibility and FINRA 6490 filings.

Investor Relations:

• Develop a Regulation FD-compliant IR plan.
• Prepare disclosure and media protocols.

Practical Tips for OTC Issuers

OTCQB and OTCQX companies can leverage their disclosure history, but must still pass exchange review. Early coordination with legal, audit, and transfer agent teams is key.

Investor Perception and Liquidity Benefits

Uplisting increases credibility, improves liquidity, and enables inclusion in ETFs and institutional portfolios.

Conclusion

Uplisting requires disciplined financial reporting, independent governance, and proactive investor relations. By aligning early with counsel, auditors, and transfer agents, OTC issuers can achieve a seamless transition to a national exchange. Hamilton & Associates Law Group assists issuers with uplist planning, Regulation S-K disclosures, FINRA and exchange filings, and governance compliance. Visit https://www.securitieslawyer101.com for related resources.

If you have questions about uplisting your company to a national exchange or would like to speak with a Securities Attorney, Hamilton & Associates Law Group, P.A. is ready to help. Our Founder, Brenda Hamilton, is a nationally known and recognized securities attorney with over two decades of experience assisting issuers worldwide with going public on the Nasdaq, NYSE, and OTC Markets. Since 1998, Ms. Hamilton has been a leading voice in corporate and securities law, representing both domestic and international clients across diverse industries and jurisdictions. Whether you are taking your company public, raising capital, navigating regulatory challenges, or entering new markets, Brenda Hamilton and her team deliver the experience, strategic insight, and results-driven representation you need to succeed.

To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected].

Hamilton & Associates | Securities Attorneys
Brenda Hamilton, Securities Attorney
200 E Palmetto Rd, Suite 103
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com