Nasdaq is proposing to adopt alternative initial and continued listing requirements for SPACs listing on the Nasdaq Global Market. Nasdaq notes in its proposal that, historically, SPACs chose to list on the Nasdaq Capital Market instead of the Nasdaq Global Market, in part, because it had lower fees and lower initial distribution requirements; however, nothing in NASDAQ’s rules prohibits a SPAC from listing on the Nasdaq Global Market. The SEC’s recent actions on SPAC accounting have prompted some SPACs to seek to list on the Nasdaq Global Market, because, as a result of recent accounting changes, the SPACs no longer have sufficient equity to qualify for initial listing on the Nasdaq Capital Market.
The focus of the Nasdaq rule proposal is on Listing Rules 5405 and 5450, which require all companies (including SPACs) listing on the Nasdaq Global Market to have at least 400 round lot holders for initial listing and 400 total holders for continued listing, respectively. Nasdaq proposes to adopt alternative listing requirements that would allow SPACs to initially list their primary equity security (other than an ADR) on the Nasdaq Global Market with at least 300 round lot holders, and remain listed if they have at least 300 public stockholders, provided that they meet certain additional requirements for initial and continued listing. Nasdaq also proposes to adopt continued listing standards for SPACs that initially listed under the proposed alternative standard and align them with the proposed initial listing standards.
– Dave Lynn