Profile of Major Stock Exchanges in North America (II)

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Profile of Major Stock Exchanges in North America (II)

NASDAQ coming from oak forest

Oak tree is the favorite to Americans and there are many stories relating to oak tree. An interesting story goes to the effect that: there is an oak forest in the US Silicon Valley and there are many venture capitalists in such oak trees; when someone shouts: “I have good project”, a few of venture capitalists will be shaken out of the oak trees; with the support of such venture capital, such projects will finally turned into products and then such venture capitalists and project developers make a great deal of money. This is the true description about the cooperation between venture capitalists and technological enterprises during the period that new and high technologies are hot in USA. NASDAQ plays an important role in facilitating such circulation, and has become the send top securities exchange system following NYSE due to its own development driven by the increasing hi-tech enterprises.

SEC was entrusted by the Capitol Hill to investigate the over-the-counter market in the year 1961. Shown as the findings, the US over-the-counter market was fragmented, and SEC suggested such practice should be automated and instructed NASD to be responsible for promotion and implementation of such automation. In the year 1971, the computers from 500 specialists were linked to the central computer of NASDAQ, marking the official operation of automated quotation of NASDAQ. In the year 1975, NASDAQ provided the listing standards so as to differ it from other over-the-counter markets.

NASDAQ means an electric quotation system in fact, not a stock exchange with the traditional fixed trading place as understood by us. Compared to NYES, NASDAQ has the lower requirements for listed companies and it is fitter for those growing technological companies with small scale for listing and financing. The Internet companies of China’s concept stocks are listed here in NASDAQ. NASDAQ is provided with two trading markets-- Nasdaq National Stock Market and Nasdaq Smallcap Stock Market. Such dual structure provides the great flexibility and can meet the demands of different listed companies. NASDAQ also adopts the specialist system—the difference from NYES is that, the companies listed in NASDAQ may have multiple specialists, whereas the companies listed in NYES shall have only one specialist. NASDAQ takes the electronic communication network as its mode of order entry, so that the liquidity of stock transaction has been enhanced greatly. The listing standards are listed as below for the Nasdaq National Stock Market and Nasdaq Smallcap Stock Market respectively. NASDAQ emphasizes the requirements to be met by an applicant for the initial public offering, and describes the requirements to be met by a listed company necessary for continuous listing for trading of its securities.