Notice2025-23655
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Modify Certain Initial Listing Requirements
Primary source
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Published
December 23, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 244 (Tuesday, December 23, 2025)</title>
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[Federal Register Volume 90, Number 244 (Tuesday, December 23, 2025)]
[Notices]
[Pages 60184-60186]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23655]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104450; File No. SR-NASDAQ-2025-068]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Amendment No. 1 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To
Modify Certain Initial Listing Requirements
December 18, 2025.
I. Introduction
On September 4, 2025, the Nasdaq Stock Market LLC (``Exchange'' or
``Nasdaq'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to modify certain initial and continued listing
requirements in Nasdaq Listing Rules 5405, 5505, 5810, and 5815. The
proposed rule change was published for comment in the Federal Register
on September 19, 2025.\3\ On September 25, 2025, pursuant to Section
19(b)(2) of the Act,\4\ the Commission designated a longer period
within which to take action on the proposed rule change.\5\ On December
11, 2025, the Exchange filed Amendment No. 1 to the proposed rule
change, which superseded the original proposed rule change in its
entirety.\6\ The Commission is publishing this notice to solicit
comments on the proposed rule change, as modified by Amendment No. 1,
from interested persons and is approving the proposed rule change, as
modified by Amendment No. 1, on an accelerated basis.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 103982 (Sept. 16,
2025), 90 FR 45280 (``Notice''). Comments received on the Notice are
available at: <a href="https://www.sec.gov/comments/sr-nasdaq-2025-068/srnasdaq2025068.htm">https://www.sec.gov/comments/sr-nasdaq-2025-068/srnasdaq2025068.htm</a>.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 104057, 90 FR 47028
(Sept. 30, 2025). The Commission designated December 18, 2025, as
the date by which the Commission shall approve, disapprove, or
institute proceedings to determine whether to disapprove the
proposed rule change. See id.
\6\ Amendment No. 1 to the proposed rule change revised the
proposal by: (1) removing the proposed modifications to Nasdaq Rules
5810 and 5815 that would have accelerated suspension and delisting
of any company that becomes non-compliant with certain quantitative
listing requirements and has a market value of listed securities of
less than $5 million for a period of 10 consecutive business days
(``Accelerated Suspension and Delisting Proposal''); (2) providing
additional description and support for certain aspects of the
proposal; and (3) making other technical and non-substantive changes
for readability. The full text of Amendment No. 1 can be found on
the Commission's website at: <a href="https://www.sec.gov/comments/sr-nasdaq-2025-068/srnasdaq2025068-683867-2114774.pdf">https://www.sec.gov/comments/sr-nasdaq-2025-068/srnasdaq2025068-683867-2114774.pdf</a>.
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II. Description of the Proposed Rule Change, as Modified by Amendment
No. 1 <SUP>7</SUP>
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\7\ All capitalized terms not otherwise defined in this order
shall have the meanings set forth in the Nasdaq Listing Rules.
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Nasdaq Listing Rules require that a company applying for initial
listing on the Exchange must have a minimum Market Value of
Unrestricted Publicly Held Shares (``MVUPHS'').\8\ For initial
[[Page 60185]]
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.\9\ 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.\10\
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\8\ 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. See Nasdaq
Rule 5005(a)(46). See also Nasdaq Rules 5005(a)(23), 5005(a)(35),
5005(a)(38), and 5005(a)(47) for the definitions of ``Market
Value,'' ``Publicly Held Shares,'' ``Restricted Securities,'' and
``Unrestricted Securities.'' The Exchange states that, like other
liquidity requirements, the MVUPHS standard 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. See
Notice, supra note 3, at 45281.
\9\ See Nasdaq Rules 5405(b)(1)(C), 5405(b)(2)(C),
5405(b)(3)(B), and 5405(b)(4)(B).
\10\ See Nasdaq Rules 5505(b)(1)(B), 5505(b)(2)(C), and
5505(b)(3)(C). For a Company listing in connection with an initial
public offering (``IPO''), including through the issuance of
American Depository Receipts, these requirements must be satisfied
from the offering proceeds. See Nasdaq Rules 5405(b)(1)(C),
5405(b)(2)(C), 5405(b)(3)(B), 5405(b)(4)(B), 5505(b)(1)(B),
5505(b)(2)(C), and 5505(b)(3)(C).
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The Exchange recently modified the liquidity requirements for the
initial listing of companies listing in conjunction with an IPO such
that shares registered for resale are no longer counted for purposes of
satisfying the minimum MVUPHS requirement.\11\ As a result, a new
company listing in connection with an IPO must meet the MVUPHS
requirement based on shares being sold in the offering.\12\ The
Exchange states that, following this change, it has observed an
increase in the number of companies applying for initial listing based
on Nasdaq's net income-based requirements, which require a lower MVUPHS
than the other standards.\13\ The Exchange states that it has observed
problematic trading in companies with low public floats and liquidity,
and the Exchange is concerned that companies initially listing with
just $5 million or $8 million MVUPHS on the Nasdaq Capital or Global
Market, respectively, may not trade in a manner supportive of price
discovery.\14\
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\11\ See Securities Exchange Act Release No. 102622 (Mar. 12,
2025), 90 FR 12608 (Mar. 18, 2025) (SR-NASDAQ-2024-084) (Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by Amendment No. 1, To Modify
Certain Initial Listing Requirements).
\12\ The Exchange states that when it made this change, it did
not increase any of the numeric requirements for MVUPHS under any of
the listing standards. See Notice, supra note 3, at 45281.
\13\ See id. The Exchange states that, prior to the new rule
taking effect, less than one-third of companies on the Nasdaq
Capital Market listed under the Net Income Standard. See id. at
45281, n.7. Since March 2025, when the change requiring companies to
satisfy the MVUPHS requirement by proceeds of the IPO took effect,
nearly three-quarters of companies listing on the Nasdaq Capital
Market have listed under the Net Income Standard. See Amendment No.
1, supra note 6, at 6, n.11.
\14\ See Notice, supra note 3, at 45281.
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Accordingly, the Exchange proposes to modify Nasdaq 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.\15\ The Exchange also proposes to modify Nasdaq
Rule 5405(b)(1)(C) to increase the minimum MVUPHS for companies listing
under the Income Standard on the Nasdaq Global Market from $8 million
to $15 million.\16\ The Exchange states that it believes that these
proposed changes will help ensure that there is a sufficient initial
pool of liquidity available to support liquid trading on the
Exchange.\17\
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\15\ The Exchange states that this change will align the MVUPHS
requirement across all of the initial listing standards on the
Nasdaq Capital Market. See id.
\16\ The Exchange states that this change will avoid having a
lower standard on the Nasdaq Global Market than on the Nasdaq
Capital Market. See id.
\17\ See id.
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The Exchange states that the proposed change will become operative
30 days after approval by the Commission.\18\
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\18\ See id. at 45282.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\19\ In particular, the
Commission finds that the proposed rule change, as modified by
Amendment No. 1, is consistent with Section 6(b)(5) of the Act,\20\
which requires, among other things, that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, 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, and not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\19\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\20\ 15 U.S.C. 78f(b)(5).
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The development and enforcement of meaningful listing standards
\21\ for an exchange is of critical importance to financial markets and
the investing public. Among other things, such listing standards help
ensure that exchange-listed companies will have sufficient public
float, investor base, and trading interest to provide the depth and
liquidity to promote fair and orderly markets. Meaningful listing
standards also are important given investor expectations regarding the
nature of securities that have achieved an exchange listing, and the
role of an exchange in overseeing its market and assuring compliance
with its listing standards.\22\
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\21\ The Commission notes that this reference to ``listing
standards'' is referring to both initial and continued listing
standards.
\22\ See, e.g., Securities Exchange Act Release Nos. 88716 (Apr.
21, 2020), 85 FR 23393 (Apr. 27, 2020) (SR-NASDAQ-2020-001) (Order
Approving a Proposed Rule Change To Modify the Delisting Process for
Securities With a Bid Price at or Below $0.10 and for Securities
That Have Had One or More Reverse Stock Splits With a Cumulative
Ratio of 250 Shares or More to One Over the Prior Two-Year Period);
88389 (Mar. 16, 2020), 85 FR 16163 (Mar. 20, 2020) (SR-NASDAQ-2019-
089) (Notice of Filing of Amendment No. 1 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, To Amend Rule 5815 To Preclude Stay During Hearing
Panel Review of Staff Delisting Determinations in Certain
Circumstances). See also Securities Exchange Act Release No. 81856
(Oct. 11, 2017), 82 FR 48296, 48298 (Oct. 17, 2017) (SR-NYSE-2017-
31) (Notice of Filing of Amendment No. 1 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, To Amend the Listed Company Manual To Adopt Initial
and Continued Listing Standards for Subscription Receipts) (stating
that ``[a]dequate standards are especially important given the
expectations of investors regarding exchange trading and the
imprimatur of listing on a particular market'' and that ``[o]nce a
security has been approved for initial listing, maintenance criteria
allow an exchange to monitor the status and trading characteristics
of that issue . . . so that fair and orderly markets can be
maintained'').
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The Exchange has proposed to make more rigorous certain of its
initial listing standards for the Nasdaq Global Market and Nasdaq
Capital Market to address recent market observations \23\ and help
ensure that an adequate level of liquidity exists for securities that
are listing on the Exchange. As discussed above, the Exchange's
proposal will align the initial listing standards for minimum MVUPHS on
the Nasdaq Capital Market by increasing the requirement for companies
listing under the Net Income Standard from $5 million to $15
million.\24\ The Exchange's proposal will also increase the minimum
MVUPHS under the Income Standard on the Nasdaq Global Market from $8
million to $15 million, thus ensuring that the net income-based
standard on the Nasdaq Global Market is not lower than the standard on
the Nasdaq Capital Market.\25\
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\23\ See supra note 13 and accompanying text.
\24\ See supra note 15 and accompanying text.
\25\ See supra note 16 and accompanying text.
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According to the Exchange, companies listing under different
initial
[[Page 60186]]
listing requirements that meet the $15 million MVUPHS requirement are
less likely to be subject to volatile trading than similarly situated
companies that meet the lower requirement for companies listing under
the net income-based standard.\26\ The Exchange states that the MVUPHS
is an indicator of sufficient liquidity to help provide price discovery
and reduce volatility.\27\ However, based on observed problems with the
trading of smaller companies, the Exchange states that it no longer
believes 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 companies that qualify for initial
listing based on an equity or market value standard.\28\
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\26\ See Notice, supra note 3, at 45282.
\27\ See Amendment No. 1, supra note 6, at 6.
\28\ See Notice, supra note 3, at 45282. See also supra note 8.
One commenter stated that the proposal should be approved and that
it supported the proposed change to initial listing requirements
``directionally insofar as it closes a loophole.'' Letter from
Jeffrey Starr, Managing Director, Head of Operations, Charles Schwab
& Co., dated Dec. 16, 2025 (``Schwab Letter''). This commenter
stated that the Exchange should raise the initial listing criteria
for listing on the Nasdaq Capital Market and adjust the minimum
standards for all tiers upwards accordingly. See id. at 3. These
additional recommendations are not before the Commission in the
proposal being considered herein.
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The Exchange's proposal is reasonably designed to enhance its
initial listing standards, particularly those involving issuers with
low public float and liquidity, thereby protecting investors and the
public interest. The proposal reasonably addresses a gap in the
Exchange's liquidity requirements for initial listing that potentially
allows issuers that may not have sufficient levels of liquidity to list
on the Exchange. Accordingly, the proposal should help to ensure that
the Exchange lists only securities with a sufficient public float,
investor base, and trading interest to provide the depth and liquidity
to promote fair and orderly markets.\29\ For these reasons, the
Commission finds that the proposed rule change, as modified by
Amendment No. 1, is consistent with the requirements of the Act.
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\29\ The Commission also received comment letters addressing the
Accelerated Suspension and Delisting Proposal and raising other
concerns related to issues in trading exchange-listed low-priced
stocks that fail to meet continued listing standards. See Schwab
Letter; Letters from Katie Kolchin, CFA, Managing Director, Head of
Equity & Options Market Structure, and Gerald O'Hara, Vice President
& Assistant General Counsel, SIFMA, dated Nov. 14, 2025; Stephen
John Berger, Managing Director, Global Head of Government &
Regulatory Policy, Citadel Securities, dated Dec. 3, 2025. See also
Letter from Kenneth E. Bentsen Jr., President & CEO, SIFMA, dated
Sept. 18, 2025, at 4, n.13. The Exchange stated that it is
considering the commenters' proposed enhancements to the Accelerated
Suspension and Delisting Proposal, and intends to resubmit a
proposal to promptly suspend and delist companies that fail to meet
minimum market value requirements. See Amendment No. 1, supra note
6, at 4, n.4. As discussed above, Amendment No. 1 removed the
Accelerated Suspension and Delisting Proposal from the proposed rule
change. See supra note 6. Thus, the areas of concern raised by the
commenters are not before the Commission in the proposal being
considered herein. In approving this proposal, the Commission is
finding the proposal before us consistent with the Act.
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IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to submit written data, views, and
arguments concerning whether the proposed rule change, as modified by
Amendment No. 1, 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#dba9aeb7bef6b8b4b6b6beb5afa89ba8beb8f5bcb4ad"><span class="__cf_email__" data-cfemail="e290978e87cf818d8f8f878c9691a2918781cc858d94">[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 January 13, 2026.
V. Accelerated Approval of the Proposed Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
1 in the Federal Register. Amendment No. 1 narrows the scope of the
proposed rule change and sets forth additional support and detail
regarding the proposal. These changes include (1) removing the
Accelerated Suspension and Delisting Proposal; (2) providing additional
description and support for certain aspects of the proposal; and (3)
making other technical and non-substantive changes for readability.
Amendment No. 1 does not alter any substantive provisions of the
remaining parts of the proposed rule change from what is set forth in
the Notice, which was subject to public comment.\30\
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\30\ The one commenter that addressed the proposed increase to
initial listing requirements supported that aspect of the proposal.
See supra note 28. The other comments received on the Notice focused
on the Accelerated Suspension and Delisting Proposal, which has been
removed. See supra note 29.
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The Commission finds that Amendment No. 1 does not raise any novel
regulatory issues that have not previously been subject to comment and
is reasonably designed to prevent fraudulent and manipulative acts and
practices, 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, and not designed to permit unfair discrimination
between customers, issuers, brokers, or dealers. Accordingly, the
Commission finds good cause, pursuant to Section 19(b)(2) of the
Act,\31\ to approve the proposed rule change, as modified by Amendment
No. 1, on an accelerated basis.
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\31\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\32\ that the proposed rule change (SR-NASDAQ-2025-068), as
modified by Amendment No. 1, be and hereby is, approved on an
accelerated basis.
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\32\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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\33\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23655 Filed 12-22-25; 8:45 am]
BILLING CODE 8011-01-P
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