On April 22, 2026, the Securities and Exchange Commission (“SEC”) filed notice soliciting comments in connection with proposed rules filed April 15, 2026 (SR-NASDAQ-2026-033) by The Nasdaq Stock Market LLC (“Nasdaq”) to raise certain initial listing requirements for special acquisition companies (“SPACs”). The principal change is to raise the size thresholds for initial listing under Nasdaq Listing Rule 5405 (The Nasdaq Global Market Initial Listing Requirements and Standards for Primary Equity Securities)and Listing Rule 5505 (The Nasdaq Capital Market Initial Listing Requirements for Primary Equity Securities).
Background
Nasdaq has three tiers: the Nasdaq Global Select Market, the Nasdaq Global Market and the Nasdaq Capital Market. Each tier has its own set of eligibility criteria including quantitative financial and liquidity thresholds. Most SPACs apply for either the Nasdaq Global Market or the Nasdaq Capital Market as they are unable to meet the thresholds for the Nasdaq Global Select Market. Historically, SPACs have listed on the Nasdaq Capital Market instead of the Nasdaq Global Market because of its lower fees and lower initial distribution requirements. However, more recently, SPACs have sought listings on the Nasdaq Global Market, in part because of the 2021 SEC Staff statement, which required SPACs to adopt different accounting practices and, as a result, caused many SPACs not to have sufficient equity to qualify for initial listing on the Nasdaq Capital Market.
On the Nasdaq Global Market, SPACs must rely on the Market Value Standard under Listing Rule 5405(b)(3) because a SPAC’s financial structure results in insufficient stockholders’ equity to qualify under the Income Standard under Listing Rule 5405(b)(1) and the Equity Standard under Listing Rule 5405(b)(2). SPACs do not have meaningful revenues to qualify under the Total Assets/Total Revenue Standard under Listing Rule 5405(b)(4).
On the Nasdaq Capital Market, SPACs must rely on the Market Value Standard under Listing Rule 5505(b)(2), because SPACs, by design, do not have substantive operations to qualify for the Equity Standard under Listing Rule 5505(b)(1) or the Net Income Standard Listing Rule 5505(b)(3).