On September 3, 2025, The Nasdaq Stock Market LLC (“Nasdaq”), posted a proposed rule on its website (the “proposed rule”), that if approved by the Securities and Exchange Commission (the “SEC”), could make it more difficult for companies to initially list, or remain listed, on Nasdaq.
Background
When a company applies for initial listing on the Nasdaq Capital Market (“Capital Market”) or the Nasdaq Global Market (“Global Market”), it must satisfy certain initial listing standards, including a minimum market value of unrestricted publicly held shares (“Public Float”) requirement. The only shares that count toward the Public Float requirement are those not held by an officer, director, or 10% shareholder of the company and not subject to resale restrictions.
Proposed Changes to Initial Listing Standards
To be listed on Nasdaq, a company must meet one of three initial listing standards for the Capital Market or one of four initial listing standards for the Global Market. The table below outlines the current and proposed Public Float requirements for each standard:
| Capital Market | Current Public Float | Proposed Public Float |
| Equity Standard | $15 million | $15 million |
| Market Value of Listed Securities Standard | $15 million | $15 million |
| Net Income Standard | $5 million | $15 million |
| Global Market | Current Public Float | Proposed Public Float |
| Income Standard | $8 million | $15 million |
| Equity Standard | $18 million | $18 million |
| Market Value Standard | $20 million | $20 million |
| Total Assets/Total Revenue Standard | $20 million | $20 million |
If approved, under the proposed rule, Nasdaq would notify a company that its securities are immediately subject to suspension and delisting when the company violates any continued listing requirement included in Nasdaq Listing Rules 5450 and 5550 and has failed to maintain a Public Float value of at least $5 million for a period of 10 consecutive business days. Unlike the general rule, where a timely request for a hearing would stay the suspension and delisting action pending the issuance of a written panel decision, a request for a hearing under the proposed rule would not stay the suspension during the appeal process.
Next Steps
Companies preparing for an initial listing on Nasdaq will need to ensure that they will be able to meet the applicable Public Float requirement. Additionally, as discussed in our LEGALcurrents, Nasdaq recently modified initial liquidity requirements to provide that shares registered for resale in an initial public offering or an uplist from the over-the-counter market will not count towards the applicable Public Float requirement.
Nasdaq has proposed that the new Public Float requirements for initial listings become effective for companies listing 30 days after SEC approval. The proposed changes that will affect companies already listed on Nasdaq would become effective for new notifications of non-compliance sent beginning 60 days after SEC approval. On September 25, 2025, the SEC designated a longer time period to take action on the proposed rule. The SEC extended the 45-day time period to 90 days to ensure that it has sufficient time to consider the proposed rule and the comments received. As a result, a decision on the proposed rule is expected to be made by December 18, 2025. If you have any questions about the proposed rule, initial listing requirements, or maintaining or regaining compliance with the rules of Nasdaq, please contact a member of Harter Secrest & Emery LLP’s Securities and Capital Markets group.