Notice2026-08112
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Certain Initial Listing Requirements for Acquisition Companies
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 27, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 80 (Monday, April 27, 2026)</title>
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[Federal Register Volume 91, Number 80 (Monday, April 27, 2026)]
[Notices]
[Pages 22558-22561]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-08112]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105291; File No. SR-NASDAQ-2026-033]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Certain Initial Listing Requirements for Acquisition Companies
April 22, 2026.
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 April 15, 2026, 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, II, and III, 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 increase the initial listing requirements
for companies whose business plan is to complete one or more
acquisitions, as described in Listing Rule IM-5101-2.
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.
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
[[Page 22559]]
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 increase the initial listing requirements
for companies whose business plan is to complete one or more
acquisitions, as described in Listing Rule IM-5101-2 (an ``Acquisition
Company'').
An Acquisition Company is a special purpose company formed for the
purpose of completing an initial public offering and engaging in a
merger or acquisition (a business combination) with one or more
unidentified companies within a specific period of time.\3\ The
securities sold by the Acquisition Companies in its initial public
offering (``IPO'') are typically units, consisting of one share of
common stock and one or more warrants (or a fraction of a warrant) to
purchase common stock, that are separable at some point after the IPO.
Due to their different structure, Acquisition Companies do not have any
prior financial history, at the time of their listing, like operating
companies.
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\3\ Pursuant to Listing Rule IM-5101-2 an Acquisition Company is
required, among other things, to keep at least 90% of the proceeds
from its IPO in an escrow account and, until the company has
completed one or more business combinations having an aggregate fair
market value of at least 80% of the value of the escrow account,
must meet the requirements for initial listing following each
business combination. If a shareholder vote on the business
combination is held, public shareholders voting against a business
combination must have the right to convert their shares of common
stock into a pro rata share of the aggregate amount then in the
escrow account (net of taxes payable and amounts distributed to
management for working capital purposes) if the business combination
is approved and consummated. If a shareholder vote on the business
combination is not held, the company must provide all shareholders
with the opportunity to redeem all their shares for cash equal to
their pro rata share of the aggregate amount then in the deposit
account.
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Historically, Acquisition Companies chose to list on the Nasdaq
Capital Market instead of the Nasdaq Global Market, in part, because it
had lower fees \4\ and lower initial distribution requirements.\5\ More
recently, certain Acquisition Companies have sought to list on the
Nasdaq Global Market. In particular, Nasdaq notes an SEC statement
about accounting treatment by Acquisition Companies \6\ and subsequent
and more recent accounting comments to Acquisition Companies have
resulted in some Acquisition Companies adopting different accounting
practices and, as a result, having insufficient equity to qualify for
initial listing on the Nasdaq Capital Market. Based on Nasdaq's
experience listing Acquisition Companies on the Global and Capital
Market tiers, Nasdaq proposes to modify Listing Rules 5405 and 5505 to
increase the listing requirements for Acquisition Companies.
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\4\ In 2021 Nasdaq amended the rules to make the listing fees
and the timing of paying such fees for Acquisition Companies listing
on the Nasdaq Capital and Global Markets the same. See Securities
Exchange Act Release No. 92345 (July 7, 2021), 86 FR 36807 (July 13,
2021).
\5\ Listing Rules 5505(a)(2) and 5505(a)(3) require a Company to
have one million Unrestricted Publicly Held Shares and at least 300
Round Lot Holders in connection with the initial listing on the
Nasdaq Capital Market. See also Listing Rules 5505(a) and (b), which
generally require minimum bid price of at least $4 per share; at
least three registered and active Market Makers; and Market Value of
Unrestricted Publicly Held Shares of $15 million, Stockholders'
equity of at least $4 million, and Market Value of Listed Securities
of $50 million under the Market Value Standard.
\6\ Staff Statement on Accounting and Reporting Considerations
for Warrants Issued by Special Purpose Acquisition Companies
(SPACs), by John Coates, Acting Director of the Division of
Corporation Finance, and Paul Munter, Acting Chief Accountant (April
12, 2021), available at: <a href="https://www.sec.gov/news/public-statement/accounting-reporting-warrants-issued-spacs">https://www.sec.gov/news/public-statement/accounting-reporting-warrants-issued-spacs</a>.
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Nasdaq Global Market
Currently, an Acquisition Company may list on the Nasdaq Global
Market if it satisfies the requirements in the Rule 5400 Series in
addition to all requirements described in Listing Rule IM-5101-2.
Generally, Acquisition Companies list on the Nasdaq Global Market under
the Market Value Standard in Listing Rule 5405(b)(3) because
Acquisition Companies' financial structure, including the redeemable
nature of the shares issued in the IPO, results in insufficient
stockholders' equity to list under the Global Market's alternative
standards.\7\
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\7\ Listing Rules 5405(b)(1) (the Income Standard) and (b)(2)
(the Equity Standard) require stockholders' equity of $15 million
and $30 million, respectively. Acquisition Companies also cannot
qualify under Listing Rule 5405(b)(4) (the Total Assets/Total
Revenue Standard) because this standard requires, among other
things, total revenue of $75 million each for the most recently
completed fiscal year or two of the three most recently completed
fiscal years. Acquisition Companies, by design, do not have any
substantive operations before listing and therefore cannot have
meaningful amounts of revenue.
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Based on Nasdaq's experience with listing Acquisition Companies on
the Global Market, Nasdaq proposes to modify Listing Rule 5405(b)(3)(A)
to increase the minimum Market Value of Listed Securities that an
Acquisition Company must have to at least $100 million.\8\ This
increased Market Value of Listed Securities requirement for the listing
of an Acquisition Company on the Global Market is the same as the
current Market Value of Listed Securities requirement under the
Alternative Initial Listing Requirements for Acquisition Companies
listing pursuant to Listing Rule 5406 on the Nasdaq Global Market. This
proposal is also consistent with the approach of the NYSE.\9\ However,
unlike Acquisition Companies listing under Rule 5406 or the NYSE
requirements, which can list with 300 shareholders, an Acquisition
Company listing under Rule 5405(b)(3)(A) would continue to be required
to have 400 shareholders.
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\8\ All other Companies listing under Listing Rule 5405(b)(3)(A)
will continue to be subject to the current Market Value of Listed
Securities requirement of $75 million.
\9\ See Section 102.06 of the NYSE Listed Company Manual.
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Nasdaq Capital Market
Currently, an Acquisition Company may list on the Nasdaq Capital
Market if it satisfies the requirements in the Rule 5500 Series in
addition to all requirements described in Listing Rule IM-5101-2.
Generally, Acquisition Companies list on the Nasdaq Capital Market
under Rule 5505(b)(2) (the Market Value of Listed Securities Standard)
because Acquisition Companies cannot qualify for listing on the Capital
Market under Listing Rule 5505(b)(1) (the Equity Standard) or Listing
Rule 5505(b)(3) (the Net Income Standard) because, by design, they do
not have any substantive operations before listing and therefore cannot
satisfy the operating history and net income from continuing operations
requirements, respectively, of these listing standards.
Based on Nasdaq's experience with listing Acquisition Companies,
Nasdaq now proposes to modify the Market Value of Listed Securities
Standard to exclude an Acquisition Company from being able to list
under that rule and to adopt new Listing Rule 5505(b)(4) to set forth
requirements for Acquisition Companies listing on the Capital Market.
Specifically, proposed Listing Rule 5505(b)(4) will require:
<bullet> Market Value of Listed Securities of $75 million (current
publicly traded Companies must meet this requirement and the $4 bid
price requirement for 90 consecutive trading days prior to applying for
listing if qualifying to list only under the Market Value Standard);
<bullet> Market Value of Unrestricted Publicly Held Shares of at
least $20 million (for a Company listing in connection with an initial
public
[[Page 22560]]
offering, including through the issuance of American Depository
Receipts, this requirement must be satisfied from the offering
proceeds); and
<bullet> At least four registered and active Market Makers.
Nasdaq also proposes to amend Listing Rule 5505(a)(3) to require
that an Acquisition Company listing on the Capital Market must have a
minimum of 400 public shareholders.\10\ These new requirements for
listing of an Acquisition Company on the Capital Market are
substantially similar to the current requirements for listing of an
Acquisition Company on the Nasdaq Global Market. This proposal is also
consistent with the requirements of NYSE American.\11\
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\10\ All other Companies listing on the Capital Market will
continue to be subject to the minimum 300 Round Lot Holders
requirement.
\11\ See Sections 101(d), 102 and 119 of the NYSE American
Listed Company Manual.
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The proposed rule change is immediately effective and will be
operative for the listing of Acquisition Companies in 30 days.
Acquisition Companies that list within that 30-day period can continue
to qualify based on the prior rules.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\13\ 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.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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Nasdaq believes that the proposal to modify Listing Rule
5405(b)(3)(A) to provide that an Acquisition Company must have a Market
Value of Listed Securities of at least $100 million to list on the
Global Market is consistent with the protection of investors because
this proposed listing requirement raises the existing threshold and is
equal to or higher than the requirements otherwise applicable to
Acquisition Companies listing on the NYSE, Nasdaq Capital Market and
NYSE American. In addition, a number of Acquisition Companies have
listed on the Nasdaq Global Market under the Alternative Initial
Listing Requirements for Acquisition Companies listing pursuant to
Listing Rule 5406 and those companies were subject to an identical
Market Value of Listed Securities requirement as now proposed by the
Exchange.
Nasdaq also believes that the proposal to allow Acquisition
Companies to list on the Nasdaq Capital Market under the existing
Nasdaq Global Market requirements for listing set forth in proposed
Listing Rule 5505(b)(4) for Acquisition Companies listing on the Nasdaq
Capital Market will protect investors because it raises the existing
requirements. Nasdaq also notes that Acquisition Companies have been
listing on the Global Market and NYSE American for a number of years
subject to initial requirements nearly identical to those included in
this proposal and that the Commission previously found these initial
listing standards to be consistent with the requirements of the Act.
Further, Nasdaq believes that the proposed rule change is designed
to promote just and equitable principles of trade, and to remove
impediments to and perfect the mechanism of a free and open market
because the proposed standards would permit Nasdaq to list securities
of Acquisition Companies that meet specified criteria, including market
value, distribution, and price requirements, which should help ensure
that the securities have sufficient public float, investor base, and
liquidity to promote fair and orderly markets. In addition, Acquisition
Companies would have to meet other existing investor protection
criteria, such as the escrow account requirement, public shareholder
approval requirement, public shareholder redemption rights, and public
shareholder liquidation preferences, which should further the ability
of investors to protect and monitor their investment pending a business
combination. Finally, Acquisition Companies that list securities on
Nasdaq would have to comply with all Nasdaq corporate governance
requirements applicable to operating companies.
While the proposed changes to the listing requirements for
Acquisition Companies set a standard that is different from the
requirements applicable to operating companies, Nasdaq does not believe
that this difference is unfairly discriminatory because, as described
above, Acquisition Companies differ structurally from operating
companies. As an investment in an Acquisition Company prior to its
business combination represents a right to a pro rata share of the
Acquisition Company's assets held in trust and the investor in an
Acquisition Company is relying on the company's management to select an
appropriate target. As such, investments in Acquisition Companies
represent different risks than other investments and the Exchange
therefore does not believe it is unfairly discriminatory to apply
different initial listing requirements to Acquisition Companies than to
other listing applicants.
Nasdaq also notes that Acquisition Companies listing under the
proposed rule will be subject to the existing requirements in Listing
Rule IM-5101-2 which requires that until the Company completes a
business combination within 36 months of the effectiveness of its IPO
registration statement, or such shorter period that the company
specifies in its registration statement (the Company must complete one
or more business combinations having an aggregate fair market value of
at least 80% of the value of the deposit account at the time of the
agreement to enter into the initial combination) the Acquisition
Company must notify Nasdaq on the appropriate form about each proposed
business combination. Following each business combination, the combined
Company must meet the requirements for initial listing. If the Company
does not meet the requirements for initial listing immediately
following a business combination or does not comply with one of the
requirements in Listing Rule IM-5101-2, Nasdaq will delist the
Company's securities.
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. Nasdaq 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
because the proposed rule change will be available to all Acquisition
Companies listing on Nasdaq and because the Commission previously found
similar initial listing standards to be consistent with the
requirements 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
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on
[[Page 22561]]
which it was filed, or such shorter time as the Commission may
designate, it has become effective pursuant to Section 19(b)(3)(A)(iii)
of the Act \14\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A)(iii).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or 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#196b6c757c347a7674747c776d6a596a7c7a377e766f"><span class="__cf_email__" data-cfemail="e391968f86ce808c8e8e868d9790a3908680cd848c95">[email protected]</span></a>. Please include
file number SR-NASDAQ-2026-033 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-2026-033. 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-2026-033 and should be submitted
on or before May 18, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-08112 Filed 4-24-26; 8:45 am]
BILLING CODE 8011-01-P
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