- with Finance and Tax Executives
- with readers working within the Securities & Investment industries
On September 3, 2025, Nasdaq filed two rule proposals with the Securities and Exchange Commission (SEC) to amend its initial and continuing listing standards. The first proposal would increase minimum requirements for public float and capital raised in IPOs and establish new suspension and delisting procedures for issuers that fail to meet Nasdaq's continued listing standards. The second proposal would adopt initial listing criteria for companies primarily operating in China.
The proposed revised standards include a $15 million minimum Market Value of Unrestricted Publicly Held Shares (MVUPHS) for new listings under the net income standard. Nasdaq explained that evolving company valuations and market structures make it necessary to update liquidity requirements to ensure these remain relevant and effective.
| Current Rules | Proposed Revisions |
 Pursuant to Listing Rule 5505(b)(3)(C), a company seeking
to be listed on the Nasdaq Capital Market must have a
minimum MVUPHS of $5 million under
the Net Income Standard, and $15 million under either the Equity or
Market Value of Listed Securities Standards.Under Listing Rule 5405(b)(1)(C), a company seeking
to be listed on the Nasdaq Global Market must have a
minimum MVUPHS of $8 million under
the Net Income Standard, $18 million under the Equity Standard, and
$20 million under either the Market Value or Total Assets/Total
Revenue Standards. |
The proposal revises Listing Rules 5505(b)(3)(C) and
5405(b)(1)(C) to require a company have a MVUPHS of at
least $15 million under the Net
Income Standard. |
In addition, Nasdaq proposed an accelerated process to suspend and delist companies with a listing deficiency that also have a Market Value of Listed Securities (MVLS) below $5 million. Nasdaq stated these changes reflect concerns about manipulative practices, including pump-and-dump schemes, in smaller company securities.
| Current Rules | Proposed Revisions |
| Listing Rule 5810(c)(1) lists all deficiencies
that result immediately in a Staff Delisting Determination.Listing Rule 5450 lists continued listing
requirements and standards for primary equity securities for
companies on the Nasdaq Capital Market.Listing Rule 5550 lists continued listing
requirements of primary equity securities for companies on the
Nasdaq Global Market. |
The proposal adds an additional type of a deficiency to
Listing Rule 5810(c)(1) that results in immediate delisting and
suspension from trading of the company's securities if
a company's MVLS has failed to maintain at least $5 million for
10 consecutive business days and it is out of compliance
with another continued listing requirement Listing Rules 5450 or
5550, as applicable.In such cases, companies would not be permitted to submit
a compliance plan (Rule 5810(c)(2)(A)(i)) or rely on a cure period
(Rule 5810(c)(3)).Securities would become subject to suspension, and a
hearing request would not stay that suspension. Nasdaq proposes to
amend Rule 5815 to remove the stay provision, so that securities
remain suspended during any appeal. |
Nasdaq also proposed a $25 million minimum public offering proceeds requirement for new listings of companies principally operating in China ("China-based companies"). The reintroduction of minimum public offering proceeds requirement specifically for China-based companies builds on previous standards set for "restrictive markets," in which the Public Company Accounting Oversight Board could not inspect auditors.
| Current Rules | Proposed Revisions |
| Currently, there are no specific minimum offering
proceeds for China-based companies. |
For IPOs, new Listing Rule 5210(l), will require that
China-based companies must raise at least $25
million in gross proceeds in a firm commitment U.S.
offering to public holders.For initial business combinations with special purpose
acquisition companies (SPACs), or "de-SPAC" transactions,
new Listing Rule 5210(l)(ii) will require a company to have a
minimum MVUPHS equal to at least $25 million
following the de-SPAC transaction.For direct listings, new Listing Rule 5210(l)(iii) will
require a Chinese-based company to meet all applicable listing
requirements for the Nasdaq Global Select Market and the additional
requirements of IM-5315-1, or the applicable listing requirements
for the Nasdaq Global Market and the additional requirements of
IM-5405-1. China-based companies however will not be permitted to
list on the Nasdaq Capital Market in connection with a direct
listing. |
If approved by the SEC, Nasdaq proposes to implement the new initial listing requirements promptly, with a 30-day transition period for companies already in process. The accelerated delisting procedures would take effect 60 days after SEC approval.
Read the proposal to modify initial and continued listing requirements and the proposal to adopt initial listing criteria for China-based companies
Visit us at mayerbrown.com
Mayer Brown is a global services provider comprising associated legal practices that are separate entities, including Mayer Brown LLP (Illinois, USA), Mayer Brown International LLP (England & Wales), Mayer Brown (a Hong Kong partnership) and Tauil & Chequer Advogados (a Brazilian law partnership) and non-legal service providers, which provide consultancy services (collectively, the "Mayer Brown Practices"). The Mayer Brown Practices are established in various jurisdictions and may be a legal person or a partnership. PK Wong & Nair LLC ("PKWN") is the constituent Singapore law practice of our licensed joint law venture in Singapore, Mayer Brown PK Wong & Nair Pte. Ltd. Details of the individual Mayer Brown Practices and PKWN can be found in the Legal Notices section of our website. "Mayer Brown" and the Mayer Brown logo are the trademarks of Mayer Brown.
© Copyright 2025. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
