Nasdaq Outlines Planned Modifications to Listing Requirements
In a series of moves aimed at safeguarding market integrity and enhancing protections for investors, Nasdaq has proposed and implemented several updates to its listing standards over the past few years.
The journey began in July 2019 when Nasdaq changed its liquidity requirements, excluding restricted holdings from the shareholder count and public float calculation. This was followed by the implementation of a new rule in September 2021, limiting companies' ability to effect excessive reverse stock splits.
In July 2023, Nasdaq proposed a new rule providing additional oversight of a principal underwriter in a Nasdaq IPO. Around the same time, the exchange introduced stricter listing standards for Chinese companies, affecting major firms such as Alibaba, Baidu, and JD.com.
In September 2022, Nasdaq enhanced its review of smaller IPOs to help ensure underwriters are focused on providing adequate liquidity. The exchange also proposed new rules in May 2020 for IPOs from "restrictive markets", with the SEC approval in October 2021. These rules imposed higher requirements for companies, mainly from China, with a minimum public offering size of $25 million or 25% of the value of their securities.
Nasdaq's commitment to capital formation, investor protection, and market integrity was further reinforced with the proposed new listing standards in January 2025. The revised standards include a $15 million minimum market value of public float for new listings under the net income standard. The exchange also decreased the time a company could trade on Nasdaq while below $1 to 360 days and prohibited further compliance periods to any company that effected a reverse stock split within the prior year.
In August 2025, Nasdaq proposed new rules to suspend and more quickly delist companies trading below $0.10 for ten consecutive trading days, even if they are not otherwise already in a compliance period. The official filings related to these proposed changes can be accessed here and here.
Regarding the accelerated process for suspending and delisting companies, Nasdaq is proposing to implement the new requirements 60 days after SEC approval. The exchange will also continue to actively refer cases to the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) on potentially manipulative trading activities.
Nasdaq's latest proposal, submitted in October 2024, further limits the time provided to companies to cure a listing deficiency if that deficiency was caused by a reverse split enacted to regain compliance with bid price requirements. The exchange responded to the SEC's request for comments regarding the eligibility of foreign companies trading in the U.S. to benefit from less burdensome U.S. reporting obligations, emphasizing the need to balance attracting foreign companies with protecting investor interests.
These changes build upon Nasdaq's history of regulatory leadership, including prior changes aimed at improving liquidity, tightening compliance timelines, and curbing abusive practices. The exchange requires newly listed companies to satisfy adjusted rules related to meeting market value thresholds solely from shares sold in the IPO. In November 2023, Nasdaq made additional changes to require additional disclosures regarding reverse splits and the process for halting stocks undergoing reverse splits.
As Nasdaq continues to evolve its listing standards, it remains committed to fostering a fair, efficient, and transparent market for all participants.
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