Consistent with the rule adopted by the New York Stock Exchange in 2018 in order to facilitate direct listings, the Securities and Exchange Commission recently approved a similar Nasdaq rule for the Nasdaq Global Select Market, Rule IM-5315-1. Although prior to the effectiveness of the rule, the Nasdaq had permitted companies to undertake direct listings, the requirements were discretionary. The new rule clarifies the circumstances under which an issuer that has not previously registered a class of its securities under the Securities Exchange Act may list its securities without undertaking a public offering of its securities under the Securities Act. The Nasdaq will consider the market value of the securities of a company that have been trading on a private secondary market prior to the Nasdaq listing. Also, the Nasdaq rule allows Nasdaq to determine whether a company has met the market value of publicly held shares listing requirement for the exchange based on an independent third-party valuation that shows at least $250 million. The valuation must be provided by an experienced valuation firm and be as of a recent date. The valuation agent must be independent. A valuation agent will not be considered independent if: the agent or any affiliate owns in the aggregate as of the valuation date more than 5% of the class of securities to be listed; the agent or an affiliate has provided investment banking services within the 12 months preceding the valuation date; and the agent or an affiliate has been engaged to provide investment banking services to the company in connection with the proposed listing or related financings or other related transactions. For an issuer that has securities that have traded on a foreign regulated exchange and is seeking to list the securities on the Nasdaq, Nasdaq will determine whether the company has met the price-based listing requirements based on the most recent trading price of its securities on the foreign trading market. As with the NYSE rule, the Nasdaq rule is applicable to companies that apply to list their securities upon the effectiveness of a registration statement that registers the resale of securities held by existing securityholders, which acquired such securities in private placements.