Legal Definitions - listed security

A listed security is a financial asset, such as a stock, bond, or fund, that has been formally approved for trading on a recognized stock exchange. For a security to be "listed," it must meet specific criteria established by the exchange, which typically include requirements for financial reporting, minimum market capitalization, and corporate governance standards. Once listed, these securities can be bought and sold by investors through the exchange, benefiting from the exchange's regulated environment, transparency, and liquidity.

• Example 1 (Common Stock): Imagine "Tech Innovations Corp.," a well-established software company, has its shares traded on the New York Stock Exchange (NYSE). These shares are considered listed securities because they have met the NYSE's rigorous requirements and are formally available for public buying and selling on that major, regulated exchange. Investors can easily find real-time prices and trade these shares through their brokerage accounts.

• Example 2 (Government Bond): A national government issues long-term bonds to finance public projects. Instead of selling these bonds only to large institutional investors in private deals, the government decides to have them formally traded on a national securities exchange. Once approved and admitted for trading, these government bonds become listed securities, making them accessible to a wider range of investors who can buy and sell them on the exchange with clear pricing and regulatory oversight.

• Example 3 (Exchange Traded Fund - ETF): An asset management company creates an Exchange Traded Fund (ETF) called "Global Health Leaders," which invests in a diversified portfolio of pharmaceutical and biotech companies worldwide. To ensure easy access and trading for individual and institutional investors, the company applies to have this ETF listed on the Nasdaq stock exchange. Upon successful listing, "Global Health Leaders" becomes a listed security, allowing investors to trade units of the fund throughout the day, just like individual stocks, on a public and regulated marketplace.