Nasdaq Proposes Higher Initial Listing Requirements for SPACs

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).

New Thresholds

Nasdaq Global Market

On the Nasdaq Global Market, SPACs would be required to demonstrate at least $100 million in “market value of listed securities,” an increase from the current $75 million requirement.  This change aligns the Global Market with Nasdaq’s alternative standards under Listing Rule 5406 and the New York Stock Exchange (“NYSE”) standards under NYSE Rule 102.06 (Minimum Numerical Standards – Acquisition Companies).

However, unlike Nasdaq’s alternative standards under Listing Rule 5406, which require at least 300 shareholders, the Market Value standard under Listing Rule 5405(b)(3)(A) will continue to require at least 400 shareholders.

Nasdaq Capital Market

The more significant revision in the proposed rules applies to the Nasdaq Capital Market. Rather than continuing to list SPACs under a framework designed for operating companies under Listing Rule 5505(b)(2), Nasdaq proposes a dedicated listing pathway for SPACs under new Listing Rule 5505(b)(4).  Under this approach, SPACs would need $75 million in market value of listed securities, at least $20 million in market value of unrestricted publicly held shares, and a minimum of four registered and active market makers.  The minimum public shareholder requirement applicable to SPACs will also be increased from 300 to 400.  These changes raise the requirements to match the current listing requirements under the Nasdaq Global Market and are also consistent with the NYSE American listing requirements under Sections 101(d), 102 and 119 of the NYSE American Listed Company Manual.

Implications

By raising the Capital Market thresholds to match those of the Global Market and aligning both with the NYSE and NYSE American standards, the proposal creates a more uniform listing framework for SPACs across exchanges.  These changes are likely to accelerate an existing shift away from the volume-driven SPAC issuance seen several years ago and toward fewer, larger, and more institutionally sponsored vehicles.  At the same time, the higher thresholds may influence transaction dynamics.  Larger SPACs are more likely to pursue combinations with larger, more established targets, which may leave smaller companies increasingly dependent on private capital alternatives.

Nasdaq characterizes the proposal as a recalibration of standards that had become misaligned with market conditions.  In particular, the 2021 SEC staff statement on SPAC warrant accounting led some issuers to restate their financial statements and revealed the extent to which certain vehicles were operating close to minimum equity thresholds.  By raising and standardizing these requirements, Nasdaq aims to promote greater liquidity, a more robust public float, and enhanced investor protections prior to completion of a business combination.  Nasdaq justifies applying different standards to SPACs because investments in SPACs carry distinct risks.  Unlike an operating company, an investor in a SPAC prior to its business combination effectively holds a right to a pro rata share of the trust assets and relies on the SPAC’s management team to identify and execute an acquisition.  The proposed standards are designed to ensure sufficient public float, investor base, and liquidity to support fair and orderly trading during that period.

Other elements of the SPAC framework remain unchanged, including escrow requirements, shareholder approval rights, and the 36-month deadline to complete a business combination or face delisting.  Nasdaq also notes that SPACs listing within the initial 30-day transition period may continue to qualify under the prior rules.  Importantly, the proposed changes only address the initial listing.  They do not alter post-combination requirements and are unlikely to materially improve the aftermarket performance of de-SPAC companies.  Following each business combination, the combined company must still meet the applicable requirements for initial listing or face delisting.

Effectiveness and Comment Period

The proposed rules automatically become effective 30 days after the filing of the proposed rule change (i.e., May 15, 2026).  However, the SEC may temporarily suspend the rule change anytime within 60 days of the proposed rule change filing.  Interested parties may submit comments to the SEC either electronically or via paper comments to the SEC by May 18, 2026 (i.e., 21 days after it was published in the Federal Register on April 27, 2026).