Notice2025-18143
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Modify Certain Initial and Continued Listing Requirements
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Published
September 19, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 180 (Friday, September 19, 2025)</title>
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[Federal Register Volume 90, Number 180 (Friday, September 19, 2025)]
[Notices]
[Pages 45280-45283]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18143]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103982; File No. SR-NASDAQ-2025-068]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Proposed Rule Change To Modify Certain Initial and
Continued Listing Requirements
September 16, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 4, 2025, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II, below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to modify certain initial and continued
listing requirements.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings">https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings</a>, and at the principal office of the Exchange.
[[Page 45281]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq is proposing to amend Listing Rules 5405(b)(1)(C) and
5505(b)(3)(C) to increase the minimum Market Value of Unrestricted
Publicly Held Shares (``MVUPHS'') requirement for companies listing
under the net income standard on the Nasdaq Global and Capital Markets,
respectively, to $15 million. Nasdaq is also proposing to suspend from
Nasdaq trading and immediately delist (rather than providing a
compliance period) any company that becomes non-compliant with one or
more of the listing requirements contained in Rule 5450 or Rule 5550
and that has a Market Value of Listed Securities of less than $5
million.
Minimum $15 Million MVUPHS for Initial Listing
Nasdaq Listing Rules require a company to have a minimum Market
Value of Unrestricted Publicly Held Shares. For initial listing on the
Nasdaq Global Market, a company must have a minimum MVUPHS of $8
million under the Income Standard, $18 million under the Equity
Standard, and $20 million under either the Market Value or Total
Assets/Total Revenue Standards.\3\ For initial listing on the Nasdaq
Capital Market, a company 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.\4\ Unrestricted
Publicly Held Shares are shares that are not held by an officer,
director or 10% shareholder of the company and which are not subject to
resale restrictions of any kind.\5\
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\3\ See Listing Rules 5405(b)(1)(C), 5405(b)(2)(C),
5405(b)(3)(B), and 5405(b)(4)(B).
\4\ See Listing Rules 5505(b)(1)(B), 5505(b)(2)(C), and
5505(b)(3)(C).
\5\ See Listing Rule 5005(a)(46).
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The MVUPHS standard is one of the core liquidity requirements
within the Nasdaq listing rules. Like the other liquidity requirements,
it is meant to ensure that there is sufficient liquidity to provide
price discovery and support an efficient and orderly market for the
company's securities. Nonetheless, Nasdaq has observed problems with
the trading of smaller company listings more generally and proposes to
increase the minimum MVUPHS to help address these concerns.
Nasdaq recently modified the liquidity requirements for initial
listing such that shares registered for resale are no longer counted as
Unrestricted Publicly Held Shares.\6\ As a result, a newly listing
company listing in connection with an initial public offering must meet
the MVUPHS based on shares being sold in the offering. When Nasdaq made
this change, it did not increase any of the numeric requirements for
MVUPHS under any of the listing standards.
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\6\ Securities Exchange Act Release No. 102622 (March 12, 2025),
90 FR 12608 (March 18, 2025) (SR-NASDAQ-2024-084).
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Following this change, Nasdaq Staff has observed an increase in the
number of companies applying for listing based on Nasdaq's net income
requirement, which requires a lower MVUPHS than the other standards.\7\
As noted above, Nasdaq Staff has observed problematic trading in
companies with low public floats and liquidity, and Nasdaq is concerned
that companies initially listing with just $5 million or $8 million
MVUPHS on the Nasdaq Capital or Global Markets, respectively, may not
trade in a manner supportive of price discovery. In particular, Nasdaq
believes that the MVUPHS is an indicator of liquidity and does not
believe it is appropriate to require such a significantly lower
liquidity threshold for companies simply because they have a minimum
level of net income, as opposed to equity or market value.
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\7\ As noted above, companies listing under the net income
standard on the Capital Market tier must have a minimum MVUPHS of $5
million under the Net Income Standard, as opposed to $15 million
under the other standards. Prior to the new rule taking effect, less
than one-third of companies listed under the net income standard. In
about five months since the change requiring companies to satisfy
the MVUPHS requirement by proceeds of the initial public offering
nearly three-quarters of companies listing on the Capital Market
tier have listed under that standard.
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Accordingly, Nasdaq is proposing to modify Listing Rule
5505(b)(3)(C) to increase the minimum MVUPHS for companies listing
under the net income standard on the Nasdaq Capital Market from $5
million to $15 million to align this requirement across all of the
listing standards on the Capital Market. In addition, to avoid having
the standard on the Nasdaq Global Market be lower than that on the
Capital Market, Nasdaq also proposes to modify Listing Rule
5405(b)(1)(C) to increase the minimum MVUPHS for companies listing
under the net income standard on the Global Market from $8 million to
$15 million. Nasdaq believes that these changes will help ensure that
there is a sufficient initial pool of liquidity available to support
liquid trading.
Accelerated Suspension and Delisting if MVLS Is Less Than $5 Million
Nasdaq rules have minimum requirements for companies to remain
listed and provide compliance periods for companies that fail to
maintain compliance with those rules. The compliance periods are
designed to allow time for companies to take action to come back into
compliance for a company facing temporary business issues, a temporary
decrease in the value of its securities, or temporary market
conditions. However, Nasdaq has observed that some companies, typically
those in financial distress or experiencing a prolonged operational
downturn, are unable to regain compliance with the listing requirements
for the long-term. The market typically identifies these companies and
investors lose interest in the companies, resulting in their having low
market values.
Nasdaq believes that once the market identifies significant
problems in a company otherwise deficient in the listing standards by
assigning a very low market value, that company is no longer
appropriate for continued trading on Nasdaq because challenges facing
such companies, generally, are not temporary and may be so severe that
the company is not likely to regain compliance within the prescribed
compliance period and sustain compliance thereafter. Moreover, it is
more difficult for market makers to make markets in these securities
and for their to be a fair and orderly market.
While Nasdaq has taken action to enhance its listing standards and
more quickly delist certain companies that have repeated failures to
maintain compliance with those standards, Nasdaq now proposes further
enhancing investor protections by providing for suspension from Nasdaq
trading and immediate delisting (rather than providing a compliance
period) of any company that becomes non-compliant with a numeric
listing requirement, including the bid price, market value of
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public float, equity, income and total assets/revenue requirements, and
that has a market value of listed securities of less than $5 million.
To effect this change, Nasdaq proposes to modify Listing Rule
5810(c)(1) to add an additional type of a deficiency that results in
immediate delisting and suspension from trading of the company's
securities. Specifically, Listing Rule 5810(c)(1) will provide that
staff's delisting notice will inform the company that its securities
are immediately subject to suspension and delisting when a company is
non-compliant with one or more of the listing requirements contained in
Rule 5450 or Rule 5550 and the company's Market Value of Listed
Securities has failed to maintain a value of at least $5 million for a
period of 10 consecutive business days.
Listing Rule 5810(c)(2)(A)(i) currently identifies all quantitative
deficiencies from standards that do not provide a compliance period as
deficiencies for which a company may submit a plan of compliance for
staff review.\8\ Nasdaq proposes to modify Listing Rule
5810(c)(2)(A)(i) to provide that the company may not submit such a plan
when the company's Market Value of Listed Securities had been less than
$5 million for a period of 10 consecutive business days. Further,
Listing Rule 5810(c)(3) currently identifies deficiencies for which the
rules provide a specified cure or compliance period. Nasdaq proposes to
modify Listing Rule 5810(c)(3) to provide that a company will not be
entitled to such cure or compliance period if the company's Market
Value of Listed Securities has failed to maintain a value of at least
$5 million for a period of 10 consecutive business days.
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\8\ As provided in Rule 5810(c)(2)(A)(i), the staff may accept a
plan to regain compliance with respect to quantitative deficiencies
from standards that do not themselves provide a compliance period.
Such standards include: Rules 5550(b)(1) {Stockholders'
Equity{time} and 5550(b)(3) {Net Income from Continuing
Operations{time} ; Rule 5550(a)(3) {Public Holders{time} ; Rule
5550(a)(4) {Publicly Held Shares{time} ; Rules 5350 [sic] (b)(1)(B)
{Publicly Held Shares{time} , 5450(b)(1)(A) {Stockholders'
Equity{time} , and 5450(a)(2) {Total Holders{time} ; Rules
5450(b)(3)(A) {Total Assets/Total Revenue{time} , 5450(b)(2)(B)
{Publicly Held Shares{time} , and 5450(a)(2) {Total Holders{time} ;
and Rules 5460(a)(1) {Publicly Held Shares{time} and 5460(a)(4)
{Public Holders{time} . See IM-5810-2. Staff Review of Deficiencies.
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Finally, as described above, Nasdaq proposes to modify Listing Rule
5810(c)(1) to provide that staff's delisting notice in these
circumstances will inform the company that its securities are
immediately subject to suspension from trading on Nasdaq. Nasdaq
believes that it is not appropriate for such a company to continue
trading on Nasdaq during the pendency of the Hearings Panel review
process. Instead, Nasdaq proposes to amend Rule 5815 to remove the stay
provision in these situations so that the company's securities will be
suspended from trading on Nasdaq during the pendency of the Hearings
Panel's review.
Specifically, Nasdaq proposes to adopt Listing Rule
5815(a)(1)(B)(ii)e. to provide that notwithstanding the general rule
that a timely request for a hearing shall ordinarily stay the
suspension and delisting action pending the issuance of a written panel
decision, a request for a hearing shall not stay the suspension of the
securities from trading where the matter relates to a request made by a
company that received a Staff Delisting Determination notice due to
non-compliance with one or more of the listing requirements contained
in Rule 5450 or Rule 5550 and the company's Market Value of Listed
Securities has failed to maintain a value of at least $5 million for a
period of 10 consecutive business days.
A company that is suspended under the proposed rule could appeal
the Delisting Determination to a Hearings Panel, but its securities
would trade in the over-the-counter (OTC) market while that appeal is
pending. Pursuant to Listing Rule 5815(c)(1)(E) the Hearings Panel will
also continue to have the authority to find the company in compliance
with all applicable listing standards and reinstate the trading of the
company's securities on Nasdaq (e.g., if the company regains compliance
with the numeric listing requirement it failed to maintain while
trading in the OTC market). In addition, pursuant to Listing Rule
5815(c)(1)(A) the Hearings Panel will continue to have discretion,
where it deems appropriate, to provide an exception for up to 180 days
from the Delisting Determination date for the company to regain
compliance with the applicable requirements, although it is expected
that trading would continue in the OTC market during the pendency of
the exception.
Nasdaq proposes to make the proposed rule change to the initial
listing MVUPHS requirement operative for companies listing 30 days
after Commission approval. Nasdaq proposes to make the proposed rule
change related to suspending from Nasdaq trading and immediately
delisting a company that becomes non-compliant with one or more of the
listing requirements contained in Rule 5450 or Rule 5550 and that has a
Market Value of Listed Securities of less than $5 million effective for
new notifications of non-compliance sent beginning 60 days after
Commission approval.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\10\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. Specifically, Nasdaq believes that the proposal to modify
Listing Rules 5405(b)(1)(C) and 5505(b)(3)(C) to increase the minimum
MVUPHS for companies listing under the net income standard on the
Nasdaq Global and Capital Markets, respectively, to $15 million is
designed to protect investors and the public interest and to remove
impediments to and perfect the mechanism of a free and open market and
a national market system because Nasdaq believes that the change will
likely result in more orderly trading of affected companies upon
listing. As described above, the MVUPHS standard is one of the core
liquidity requirements within the Nasdaq listing rules designed to
ensure that there is sufficient liquidity to provide price discovery
and support an efficient and orderly market for the company's
securities. Based on Nasdaq's experience, companies listing under
different standards that meet the $15 million MVUPHS requirement are
less likely to be subject to volatile trading than similarly situated
companies that meet the current, lower requirement for companies
listing under the net income standard. Nasdaq believes that these
changes will help ensure that there is a sufficient initial pool of
liquidity available to support liquid and orderly trading.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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Nasdaq also believes that the proposal to suspend from Nasdaq
trading and immediately delist (rather than providing a compliance
period) any company that becomes non-compliant with one or more of the
listing requirements contained in Rule 5450 or Rule 5550 and that has a
Market Value of Listed Securities of less than $5 million is designed
to promote just and equitable principles of trade and, in general to
protect investors and the public interest by enhancing Nasdaq's listing
requirements and limiting the time that a security can remain listed
and trade on Nasdaq in these circumstances. In that regard, Nasdaq
[[Page 45283]]
has observed that the challenges facing such companies generally are
not temporary and may be so severe that the company is not likely to
regain compliance within the prescribed compliance period. Moreover,
the concerns with Market Value of Listed Securities of less than $5
million with these companies can be a leading indicator of other
listing compliance concerns, and these companies often become subject
to delisting for other reasons during the compliance periods.
Nasdaq also believes that the proposal to amend Listing Rule
5815(a)(1)(B)(ii) to provide that a hearing request shall not stay the
suspension of the securities from trading when the matter relates to a
request made by a company that received a Staff Delisting Determination
notice due to non-compliance with one or more of the listing
requirements contained in Rule 5450 or Rule 5550 and the company's
Market Value of Listed Securities has failed to maintain a value of at
least $5 million for a period of 10 consecutive business days is
designed to protect investors and the public interest. In particular,
this change will prevent continued trading in such company's securities
until an independent Hearings Panel reviews the Delisting Determination
and determines that the company has regained compliance with all
listing requirements and that continued trading on Nasdaq is
appropriate.
Finally, Nasdaq believes the proposed rule change furthers the
objectives of Section 6(b)(7) of the Act in that it continues to
provide a fair procedure for companies subject to these enhanced
listing requirements. These companies can seek review of a Delisting
Determination from a Hearings Panel, which can afford the company
additional time to regain compliance, and can appeal the Hearings Panel
decision to the Nasdaq Listing and Hearing Review Council.\11\ As a
result, Nasdaq believes that the proposed rule appropriately balances
the need for appropriate listing standards with the statutory
requirement to protect investors and the public interest.
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\11\ See Listing Rules 5815 and 5820, respectively.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. While Nasdaq does not believe
there will be any impact on competition from the proposed change, any
impact on competition that does arise will be necessary to better
protect investors, in furtherance of a central purpose of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) by order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#750700191058161a1818101b0106350610165b121a03"><span class="__cf_email__" data-cfemail="cbb9bea7aee6a8a4a6a6aea5bfb88bb8aea8e5aca4bd">[email protected]</span></a>. Please include
file number SR-NASDAQ-2025-068 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NASDAQ-2025-068. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection.
All submissions should refer to file number SR-NASDAQ-2025-068 and
should be submitted on or before October 10, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2025-18143 Filed 9-18-25; 8:45 am]
BILLING CODE 8011-01-P
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