Getting Tough

Stricter listing requirements on Nasdaq are driving many companies off the market. The changes, adopted this year, are designed to protect investors and boost the quality of companies listed on Nasdaq. The new requirements:

FOR THE NATIONAL MARKET:

* Stocks whose bid, or offer to buy, price falls under $1 for 30 days or more are subject to delisting. Nasdaq is the only market that has a stated minimum bid price requirement.

* Net tangible assets of at least $4 million and market value of at least $5 million or, for companies with fewer tangible assets, $50 million market capitalization and a $5 minimum bid price. The latter are subject to delisting if they fall under $5 for more than 30 days.

FOR THE NASDAQ SMALL-CAP MARKET:

* $1 minimum bid price.

* Net assets of at least $2 million and market value of $1 million. If a company does not have tangible assets, it can have a $35 million market cap and $500,000 net income in the latest fiscal year.

* Adoption of corporate governance rules, including distribution of annual and interim reports; minimum of two independent directors; an audit committee, the majority independent auditors; and an annual shareholders meeting.