Securities and Capital Markets attorney C. Christopher Murillo spoke with Tom Zanki from Law360 about what Nasdaq’s tighter IPO rules could mean for small companies.
The SEC approved the new rule, set to take effect April 11, 2025 where many issuers will have to raise at least $15 million to list on the Nasdaq Capital Market, which serves smaller companies. The new Nasdaq rule appears in the wake of last year’s NYSE rule that increased initial listing requirements to $10 million. Now both of these major exchanges have accelerated delisting procedures.
With both exchanges tightening standards, Murillo, who advises public and private companies, told Law360, “If you’re a pre-revenue company, like a biotech or a small company that doesn’t have a significant amount of net income, these are a big deal. The new Nasdaq rules may unintentionally spur more companies to explore “de-SPAC” mergers now that conventional listing paths are stricter. This will make things like reverse takeovers and de-SPAC transactions more attractive since there’s a narrow path to an IPO,” Murillo said.
The Harter Secrest & Emery Securities and Capital Markets attorneys will keep you updated with the ever-evolving SEC regulations. Read the full Law360 Nasdaq’s Tighter IPO Rules Raise Bar For Small Companies article here.