A primary listing is a financial term that is used in reference to the primary or main stock exchange where a company’s stock is listed. Companies with publicly traded stock are usually required to designate a stock exchange that will serve as the place from which the company’s stock will be either sold or bought by interested parties. This designated stock exchange does not have to be the sole stock exchange from which a company’s stock will be traded, though the company will be required to choose one major source to serve this purpose. The main reasoning behind the concept of primary listing is the fact that it serves to render some form of stability to the process of trading on the company’s stock and makes it easier for potential investors to have a yardstick for estimating the company's potentials and for assessing the merits or otherwise of investing in the company.
Most companies prefer to be listed on the more recognized stock exchanges in the world due to the belief by the managers of such companies that this would be a coup that will serve to increase the visibility of the company and to also further convince potential investors that the company is a good place to invest in. Most companies prefer to be listed on the more recognized stock exchanges in the world since the managers believe that this would serve to increase the visibility of their organizations as well as to further convince potential investors that their companies are a good place to invest. As such, companies that manage to designate any of the number of well-known stock exchanges for their primary listing will be able to capitalize on this to their advantage in specified ways.
The fact that a company may have designated any one stock exchange as its primary listing in no way precludes the company from listing other stock exchanges as a supplementary or secondary source. Where this is the case, the process is referred to as cross listing, a reference to the dual or multiple listings. In order to qualify to have a primary listing and other forms of listings, the company would have to be able to fulfill certain requirements. For instance, the company would be required to be global in terms of the fact that it is not based in just one country, but has branches in various other countries from which it also does business. Apart from this, such a company that desires to have more than just the primary listing would also be required to meet a certain predetermined share liquidity, in addition to other specified criteria.
