Listed Securities are shares, debentures or any other securities that is traded through an exchange such as BSE, NSE, etc. When a private company decides to go public and issue shares, it will need to choose an exchange on which to be listed. To do so, it must be able to meet that exchange's listing requirements and pay both the exchange's entry and yearly listing fees. Listing requirements vary by exchange and include minimum stockholder's equity, a minimum share price and a minimum number of shareholders. Exchanges have listing requirements to ensure that only high quality securities are traded on them and to uphold the exchange's reputation among investors.
In India, listed securities are traded through demat accounts. While trading this shares on stock exchange, Securities Transaction Tax (STT) is paid on sale value of share. As STT is paid on sale, there are tax benefits like exemption for Long Term Capital Gain Income (LTCGI), 15% tax on Short Term Capital Gain Income (STCGI), etc benefits are provided to the taxpayers.
Unlisted Securities are shares, debentures or any other securities that are not traded on an exchange but through the over-the-counter (OTC) market. Unlisted securities are also called OTC securities. Market makers facilitate the buying and selling of unlisted securities in the OTC market. Because they are not exchange traded, unlisted securities can be less liquid than listed securities.