By: Cydney Posner

Nasdaq is proposing to increase the initial and continued listing requirements applicable to the Nasdaq Capital Market (Rule 4310 and Rule 4320). The stated purpose is to facilitate a finding by the SEC that the listing standards for the Capital Market are substantially similar to the listing standards applicable to securities listed on the NYSE, the ASE or the Nasdaq Global Market. This finding is apparently necessary to permit the SEC to designate securities listed on the Capital Market as "covered securities" exempt from state regulation under NSMIA.

For companies seeking to satisfy the income or market value listing standards, Nasdaq proposes to also require a minimum of $4 million in equity in each case. For companies listing under the equity alternative, Nasdaq proposes to require a two-year operating history, instead of

the current one-year requirement. For companies listing under the market value of listed securities and equity alternatives, Nasdaq proposes to increase the market value of publicly held shares requirement for initial listing from $5 million to $15 million. Finally, Nasdaq proposes to clarify that, for both initial and continued listing, all companies must have 300 round lot holders of common. (This appears to be the only proposed change for continued listing of common.) There are proposed changes to other listing standards for other securities as well.

To allow currently listed companies adequate time to comply with the changes, Nasdaq proposes that the changes to the continued listing requirements be made effective 30 days after SEC approval. For initial listing, Nasdaq proposes that the new requirements be effective upon approval for companies that apply after the date this proposed rule change is submitted to the SEC.

This content is provided for general informational purposes only, and your access or use of the content does not create an attorney-client relationship between you or your organization and Cooley LLP, Cooley (UK) LLP, or any other affiliated practice or entity (collectively referred to as "Cooley"). By accessing this content, you agree that the information provided does not constitute legal or other professional advice. This content is not a substitute for obtaining legal advice from a qualified attorney licensed in your jurisdiction, and you should not act or refrain from acting based on this content. This content may be changed without notice. It is not guaranteed to be complete, correct or up to date, and it may not reflect the most current legal developments. Prior results do not guarantee a similar outcome. Do not send any confidential information to Cooley, as we do not have any duty to keep any information you provide to us confidential. When advising companies, our attorney-client relationship is with the company, not with any individual. This content may have been generated with the assistance of artificial intelligence (Al) in accordance with our Al Principles, may be considered Attorney Advertising and is subject to our legal notices.