Most stocks that are bought and sold are listed on a stock exchange. But stock exchanges don’t just take any old stock. Just because you want to offer stock from your recycled chewing-gum start-up company, for example, on a particular exchange, doesn’t mean you should strut down Main Street wearing a fur coat and handing out Susan B. Anthony coins to street urchins while bragging about a stock listing. That’s because each exchange has an admission board that determines whether a particular stock should be listed on their exchange.
Much like a college admission board that requires a minimum grade point average, minimum test scores, and the ability to not offend millions of people on Twitter on a bi-weekly basis, a stock exchange admission board establishes standards for admission to its exchange and requires companies to submit financial statements, prospectuses, and other stock-exchangy type stuff.
Related or Semi-related Video
![Finance: What is a red herring? (Plus Brochure Rule, Sales Literature and the Preliminary Prospectus)](https://media1.shmoop.com/video/thumbnails/COURSE.FINANCE.454_770x433.jpg)
Finance: What is a red herring? (Plus Br...25 Views
finance a la shmoop what is a red herring?
hi I'm red, red-err-ing.. red herring I'm here to tell you about my role in high [Red herring swimming in the ocean]
finance I'm actually the co-star of an IPO, how so you asked well yes of
course you asked..what's that, what's my primary job well my primary job is to
distract that's kind of why I was put on earth here to distract people, fish and [Man on a ship]
birds from you know other things that's what the red in red herrings do and no
we're not communists although we all do like the same brand of plankton but
that's me the fish me the IPO mascot that's a lot more fun...
I'm the namesake of an investment marketing document I'm the papers that
get filed with the SEC that outline the details of a new offering an IPO....
A secondary placement of founder shares after a company has already been public
a while as well I'm also there for a bond offering, a proposed merger all of [List of what red herrings are used for]
them need me so why do I exist.... while the goal here is to give investors
time to really get to know the issue they may want to invest in I don't carry
all the details not specific pricing, no legally binding asks and just an outline
of what's being proposed but I'm like 98% done and by not being fully done
it's easy to amend and tweak and change this and that so that the really uptight [Red herring talking]
fisherman at the SEC don't get all hacked off if they you know end up
reeling something in that well they didn't want [Fisherman catches a shark]
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