By: Jeffrey Koeppel and Marissa A. Johnson
Overview
On April 22, 2026, the SEC published notice of a proposed rule change by The Nasdaq Stock Market LLC (Release No. 34-105291; File No. SR-NASDAQ-2026-033) to tighten initial listing requirements for acquisition companies (commonly known as SPACs).
Key Changes
Nasdaq Global Market
Nasdaq is modifying Listing Rule 5405(b)(3)(A) to increase the minimum Market Value of Listed Securities that a SPAC must have to list on the Nasdaq Global Market to at least $100 million. A SPAC listing under Rule 5405(b)(3)(A) would continue to be required to have 400 shareholders. All other companies listing under Listing Rule 5405(b)(3)(A) will continue to be subject to the current Market Value of Listed Securities requirement of $75 million.
Nasdaq Capital Market
To list on the Nasdaq Capital Market, new Listing Rule 5505(b)(4) will require:
- Market Value of Listed Securities of $75 million (current publicly traded companies must meet this requirement and the $4 bid price requirement for 90 consecutive trading days prior to applying for listing if qualifying to list only under the Market Value Standard);
- Market Value of Unrestricted Publicly Held Shares of at least $20 million (for a company listing in connection with an initial public offering, including through the issuance of American Depository Receipts, this requirement must be satisfied from the offering proceeds); and
- At least four registered and active Market Makers.
New Listing Rule 5505(a)(3) requires that a SPAC listing on the Capital Market must have a minimum of 400 public shareholders.
Structural Rationale
Nasdaq emphasizes that acquisition companies lack operating history and revenue at IPO, rely on future business combinations for value creation, and provide investors with redemption rights tied to trust account proceeds. Nasdaq believes heightened initial listing thresholds are necessary to ensure sufficient liquidity, investor base, and market quality.
Continued Applicability of Existing SPAC Protections
The proposal does not modify core SPAC investor protections under Listing Rule IM-5101-2, including the trust/escrow requirement (at least 90% of IPO proceeds), the 80% fair market value test for business combinations, shareholder redemption rights, and post-combination requalification for initial listing standards.
Regulatory Status and Timing
The rule change will become operative on May 22nd, 2026, absent SEC action. SPACs that list within that 30-day period can continue to qualify based on the prior rules. The SEC retains authority to temporarily suspend the rule within 60 days and institute proceedings.
Practical Implications
For SPAC Sponsors and Issuers: Higher thresholds may limit access to Nasdaq listing tiers, particularly for smaller SPACs. Sponsors may need to increase IPO size or investor distribution to qualify. The $75 million minimum value of listed securities tier change would likely push smaller SPACs off of Nasdaq entirely unless they upsize, which would have downstream consequences for redemption dynamics and trust sizing.
For example, while a SPAC needs to meet the $75 million minimum value of listed securities (“MVLS”) for initial listing purposes, Nasdaq IM-5101-2 would require a combined company post-merger in the case of a de-SPAC to meet the $75 million threshold. Therefore, a SPAC seeking to list on Nasdaq at exactly the minimum ($75 million) would have virtually no cushion to account for investors that may redeem their shares. SPAC redemptions have been high in recent years, so it is very likely that a SPAC doing an IPO at $75 million would end up risking delisting by Nasdaq due to redemptions of the trust balance.
Further, any drop in the share price after the initial closing would decrease the Market Value of Listed Securities which might cause the Nasdaq to halt the merger or refuse to list the new company’s shares, effectively killing the deal at the finish line. This may make obtaining private financing mandatory in smaller deals in order to guarantee deal certainty to the target company. Private financing of the public company (known as a “PIPE”) will be more expensive to the SPAC sponsors who may be forced to offer discounted shares or cheap warrants to the private funds who come in to shore up the transaction.
Smaller SPACs currently undergoing the IPO process have until May 22, 2026, to evaluate whether they can price and list before this date or whether they will need to upsize or list on an alternative exchange, such as New York Stock Exchange American (NYSE American), over the counter (OTC), or decide whether going public is a viable option.
SPAC sponsors currently looking to undergo a business combination may respond by building in larger minimum cash conditions in their business combination agreements, which may make it more difficult to close a business combination. Sponsors may also choose to obtain more financing such as via a PIPE, which introduces additional dilution and added execution risk.
For Investors: The changes are designed to enhance liquidity and reduce risks associated with thinly capitalized SPACs. The higher minimum MVLS continues Nasdaq’s recent push to keep poorly capitalized companies off of the Exchange. Nasdaq is seeking to increase the public float to tamp down the possibility of market manipulation by larger stockholders or through social media driven momentum. And, by requiring the combined company to meet the $75 million threshold, the Nasdaq is making the requirement the same as the NYSE American.
For Market Participants: The proposal reflects broader competitive alignment among the stock exchanges and continued regulatory scrutiny of SPAC structures.
Key Takeaways
Nasdaq’s proposal represents a meaningful recalibration of SPAC listing standards, signaling a shift toward larger, more robustly capitalized vehicles and reinforcing the trend toward heightened regulatory oversight of blank-check companies.
You can read the rule change here.
If you have any questions regarding this client alert, please call or e-mail your SRFC attorney.
DISCLAIMER: This communication, which we believe may be of interest to our clients and friends of the firm, is for general information only. It is not a full analysis of the matters presented and should not be relied upon as legal advice. This may be considered attorney advertising in some jurisdictions.