What is NASDAQ Global Select Market Composite
The NASDAQ Global Select Market Composite is a market capitalization-weighted index composed of US and international stocks that represent the NASDAQ Global Select Market Composite. The NASDAQ Global Select Market Composite is made up of 1,200 stocks that meet the strict financial and liquidity requirements of Nasdaq and the standards of corporate governance. The Global Market Select Composite is more exclusive than the Global Market Composite. Each October, the Nasdaq listing qualifications department reviews the Global Market Composite to determine if any of its stocks have become eligible for listing on the Global Select Market.
BREAKDOWN OF NASDAQ Global Select Market Composite
This stock market index was created in July 2006 when the Nasdaq National Market, created in 1984, split into two levels, the NASDAQ Global Market and the NASDAQ Global Select Market. The change was minimal as it did not affect the listing standards, but rather was intended to reflect the global reach of the index and the companies listed. The select index includes about a third of the largest companies listed on NASDAQ.
The companies that make up each level of the NASDAQ are classified according to their market capitalization. The NASDAQ Global Select Market level is the most selective level. To be eligible for this “large capitalization” category, a company must meet the most stringent financial requirements. The actions of a company are reviewed annually to ensure that they continue to be listed at the right level. If a security meets or exceeds its current market capitalization requirements, below its current level, it could be promoted to the higher market capitalization level. If, however, a company’s shares do not meet the market capitalization requirements of its current level, they can be downgraded to a smaller market capitalization level.
NASDAQ Global Select Market Compared to Other NASDAQ Levels
NASDAQ had three distinct levels: the NASDAQ Global Select Market, the NASDAQ Global Market and the NASDAQ Capital Market. Prospective NASDAQ companies must meet a variety of financial, liquidity and corporate governance requirements to be approved for listing at any market level. The conditions for inclusion in the NASDAQ Global Select Market are the most stringent of the three. The requirements of the NASDAQ Global Market are more stringent than those of the NASDAQ Capital Market. It is important to note that the corporate governance requirements are the same at all levels of the NASDAQ market.
Even if a company’s securities qualify for initial inclusion, NASDAQ can refuse initial listing or apply additional conditions, if necessary to protect investors and the public interest.