New Reason to List

The rush to get listed on the stock exchanges has been going on for many months, partly because U.S. companies are increasingly aware of the advantages of listing: added prestige, broader ownership of shares, more active trading in the stock. Last week they got an added reason for listing that is sure to speed up the trend. President Johnson signed a bill that gives the Government broad new authority to regulate stocks traded both on and off the exchanges.

Under the "full disclosure law," companies with at least 750 stockholders and assets of $1,000,000 will be required to file detailed financial reports to the Securities and Exchange Commission. Thus firms whose stock is traded over the counter will now be subject to the same rules as listed companies in such matters as issuing proxy statements, making regular reports to stockholders and providing information on trading in the stock by corporation officials and principal shareholders. Gone will be much of the treasured privacy of the some 3,000 companies that fall under the new law--and gone, too, will be the chief reason that most of them had for not listing.

At least 800 of these companies are eligible to be listed on the American Stock Exchange, but only 125 of them meet the tougher requirements of the New York Stock Exchange, which raised its standards again in March. Most companies can make the decision about listing in their own boardrooms, but the nation's banks have had to wait for authorization from their regulatory agencies. Last week Federal Reserve member banks got the initial go-ahead to list, and Chase Manhattan was the first to announce that it had applied to the New York Exchange.

So far this year, the New York Exchange has listed 47 new companies, compared with 59 in all of 1963. This week two more names--Rayette and First Western Financial--go on the Big Board, and on Sept. 8 Communications Satellite Corp. will make its debut with the tape initials CQ, the ham radio code for "if you hear me, come in." The American Exchange is picking up new listings even faster: 57 this year v. 31 in a comparable period last year. But there is still a lot more to come: of the nation's 1,200,000 corporations, only 2,600 are listed on any exchange.

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