Nasdaq Increases Initial Listing Requirements for Special Purpose Acquisition Companies (SPACs)
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Nasdaq recently filed a proposed rule change (Release No. 34-105291) to its initial listing standards applicable to Acquisition Companies, commonly referred to as Special Purpose Acquisition Companies (“SPACs”). The proposed rule change modifies certain listing requirements for SPACs seeking to list on the Nasdaq Global Market and Nasdaq Capital Market.
According to Nasdaq, the proposed rule change was adopted based on its recent experience with SPAC listings and changes in accounting treatment that have affected how certain SPACs satisfy existing listing standards.
This article summarizes the key aspects of the new listing requirements and their potential implications for SPAC issuers.
Background
Nasdaq defines an “Acquisition Company” as a special purpose company formed to complete an IPO and later engage in a merger or acquisition with one or more unidentified companies within a specified period of time.
Historically, many SPACs chose to list on the Nasdaq Capital Market because it generally had lower fees and lower initial distribution requirements. Nasdaq noted, however, that certain SPACs have more recently sought to list on the Nasdaq Global Market following SEC accounting guidance relating to SPAC warrants and related accounting treatment. According to Nasdaq, some SPACs adopted accounting practices that resulted in insufficient stockholders’ equity to qualify for listing on the Nasdaq Capital Market under existing standards.
As a result, Nasdaq proposed a rule change to Listing Rules 5405 and 5505 to increase the listing standards applicable to SPACs.
Changes to Nasdaq Global Market Requirements
Under the proposed rules, a SPAC listing on the Nasdaq Global Market under Listing Rule 5405(b)(3)(A) must now have a minimum Market Value of Listed Securities of at least $100 million.
Previously, the threshold was $75 million. Nasdaq stated that the revised threshold aligns with the existing requirements under Nasdaq Global Market Rule 5406 for Acquisition Companies and is also consistent with NYSE standards.
Nasdaq also noted that SPACs listing under this rule will continue to be required to have at least 400 shareholders, unlike certain alternative SPAC listing standards that permit 300 shareholders.
Changes to Nasdaq Capital Market Requirements
The proposed rule change also introduces new listing requirements specifically applicable to SPACs listing on the Nasdaq Capital Market.
Under the proposed rules, SPACs will no longer qualify under the existing Market Value of Listed Securities Standard in Rule 5505(b)(2). Instead, Nasdaq adopted new Rule 5505(b)(4), which establishes separate standards for Acquisition Companies.
Under the new rule, a SPAC listing on the Nasdaq Capital Market must satisfy the following requirements:
- Market Value of Listed Securities of at least $75 million
- Market Value of Unrestricted Publicly Held Shares of at least $20 million
- At least four registered and active market makers
In addition, Nasdaq amended Rule 5505(a)(3) to require SPACs listing on the Nasdaq Capital Market to have at least 400 public shareholders.
Nasdaq stated that these revised Capital Market requirements are substantially similar to the requirements currently applicable to SPACs listing on the Nasdaq Global Market and are also consistent with NYSE American requirements.
Continued Application of Existing SPAC Protections
Nasdaq emphasized that SPACs listing under the proposed new rules will continue to remain subject to the requirements of Listing Rule IM-5101-2. These protections include:
- Maintaining at least 90% of IPO proceeds in a trust or escrow account
- Redemption rights for public shareholders
- Shareholder approval requirements for business combinations
- Liquidation protections if a business combination is not completed within the required timeframe
Nasdaq also noted that following a business combination, the combined company must satisfy Nasdaq’s initial listing standards. If those requirements are not met, Nasdaq may delist the company’s securities.
Effective Timing of the Rule Change
The proposed rule change became immediately effective upon filing on April 15, 2026, and will become operative for SPAC listings after 30 days, on May 15, 2026. SPACs listing during that 30-day period may continue to qualify under the prior rules.
Key Takeaway
Nasdaq’s proposed rule change increases the initial listing thresholds applicable to SPACs on both the Nasdaq Global Market and Nasdaq Capital Market.
The revised rules appear intended to align listing standards across Nasdaq markets and address issues arising from SPAC accounting treatment and listing eligibility. The proposed rule change also continues Nasdaq’s emphasis on liquidity, shareholder distribution, and investor protection requirements applicable to Acquisition Companies.
If you would like to discuss Nasdaq SPAC listing requirements or structuring considerations for SPAC IPOs and de-SPAC transactions, our team would be happy to assist.
Contact Person: Nick L. Torres, Esq. and Zhiqi Zheng, Esq.
Written By Weiwei Lu
Weiwei Lu specializes in securities law and corporate matters, and general public company work. She leverages her bilingual proficiency in English and Mandarin and her deep understanding of cross-border business and cultural environments to help Chinese companies navigate the complex and rapidly evolving U.S. legal and regulatory landscape. With strong cross-cultural communication skills, she supports clients in facilitating efficient transactions and achieving their business goals.
