Date: September 5, 2025
Source:
https://listingcenter.nasdaq.com/assets/rulebook/nasdaq/filings/SR-NASDAQ-2025-
068.pdf
https://listingcenter.nasdaq.com/assets/rulebook/nasdaq/filings/SR-NASDAQ-2025-
069.pdf
Key Takeaway:
Nasdaq proposed changes to its initial and continued listing standards, including a US$15 million minimum market value of public float for new listings under the net income standard and an accelerated delisting process for securities with a listing deficiency and a market value of listed securities below US$5 million.
Nasdaq proposed a US$25 million minimum public offering proceeds requirement specifically for new listings of companies principally operating in China. Liquidity Requirements: US$15 Million Minimum Market Value of Unrestricted Publicly Held Shares for New Listings
Nasdaq is proposing to raise the minimum Market Value of Unrestricted Publicly Held Shares (“MVUPHS”) requirement for companies listing under the net income standard on the Nasdaq Global Market and the Nasdaq Capital Market. Unrestricted Publicly Held Shares are shares that are not held by an officer, director or 10% shareholder and that are free of resale restrictions.
Currently, a company must have a minimum MVUPHS of US$8 million under the income standard for initial listing on the Nasdaq Global Market or a minimum MVUPHS of US$5 million under the net income standard for initial listing on the Nasdaq Capital Market. The Proposed Listing Standards would increase the MVUPHS requirement to US$15 million for companies listing under the net income standard for both the Nasdaq Global Market and the Nasdaq Capital Market.
Accelerated Suspension and Delisting if MVLS Is Less Than US$5 Million Nasdaq is also proposing to amend its rules to accelerate the suspension and delisting process for certain noncompliant companies. Specifically, if a company that has a Market Value of Listed Securities (“MVLS”) of less than US$5 million becomes noncompliant with a quantitative continued listing requirement (minimum bid price, MVLS or market value of publicly held shares), it will be subject to immediate suspension and delisting without a compliance period.
Under the current rules, a company listed on Nasdaq that falls out of compliance with quantitative continued listing requirements is typically granted a 180-day grace period to regain compliance. A request for a hearing usually stays the delisting process. The Proposed Listing Standards would eliminate the grace periods for a company whose MVLS has remained below US$5 million for 10 consecutive business days. According to the Proposed Listing Standards, Nasdaq believes it is not appropriate for such a company to continue trading on Nasdaq during the pendency of a hearing and will suspend trading in its securities immediately.
Heightened Listing Standards for China-Based Companies Nasdaq is also proposing to adopt new listing requirements for companies headquartered, incorporated or principally administered in China (including Hong Kong and Macau):
IPOs: Companies seeking to list on Nasdaq must raise a minimum of US$25 million in public offering proceeds. De-SPAC Transactions: Following a de-SPAC transaction, the company must have a minimum MVUPHS of at least US$25 million. Direct Listings: Companies will be precluded from listing on the Nasdaq Capital Market in connection with a direct listing.
Transfers From Other Markets: In the case of a company transferring its listing from the OTC market or from another national securities exchange, the company must have a minimum MVUPHS of at least US$25 million and have traded on the other market for at least one year before it is eligible to list on Nasdaq. A company is considered “principally administered in China” if any of the following tests are met:
- the company’s books and records are located in China;
- at least 50% of the company’s assets are located in China;
- at least 50% of the company’s revenues are derived from China;
- at least 50% of the company’s directors are citizens of, or reside in, China;
- at least 50% of the company’s officers are citizens of, or reside in, China;
- at least 50% of the company’s employees are based in China; or
- the company is controlled by, or under common control with, one or more persons or entities that are citizens of, reside in or whose business is headquartered, incorporated or principally administered in China.
Why？“Investor protection and market integrity are central to Nasdaq’s mission,” said John Zecca, Executive Vice President and Global Chief Legal, Risk & Regulatory Officer. “These enhancements reflect our ongoing commitment to evolve our standards in step with market realities and to lead by example in promoting fair and orderly markets. By increasing our standards for the minimum public float and the public offering raise in certain new listings, it provides a healthier liquidity profile for public investors, while still making emerging companies available to investors through our exchange. These new
listing standards represent one step in a necessary, industry-wide effort—alongside regulators, U.S. exchanges, and market participants—to closely examine trading behaviors in small company securities, with the goal of safeguarding market integrity and enhancing protections for investors.”
