Nasdaq Raises the Bar on SPAC Listing Standards

On April 15, Nasdaq filed a proposed rule change (File No. SR-NASDAQ-2026-033) with the US Securities and Exchange Commission (SEC) to increase initial listing requirements for SPACs (referred to in Nasdaq’s rules as “Acquisition Companies”). On April 22, the SEC published notice of the filing’s immediate effectiveness (Release No. 34-105291). Although labeled “proposed,” the rule change took effect automatically under Section 19(b)(3)(A)(iii) of the Securities Exchange Act of 1934 and becomes operative on May 15. SPACs that list within the 30-day window before May 15 may still qualify under the prior rules.

Background

Under Nasdaq’s existing framework, an acquisition company is a special purpose company formed to complete an initial public offering (IPO) and then merge with or acquire one or more operating companies within a specified timeframe. SPACs typically sell units in their IPOs consisting of one share of common stock and one or more warrants (or a warrant fraction) to purchase common stock; these components become separately tradeable after the IPO. Unlike operating companies, SPACs have no prior financial history at the time of listing.

SPACs have traditionally listed on the Nasdaq Capital Market rather than the Global Market due to lower fees and less stringent distribution requirements. In recent years, however, some have opted for the Global Market. Nasdaq has observed that SEC guidance on the accounting treatment of SPAC-issued warrants has led certain SPACs to adopt different accounting practices, leaving some without sufficient equity to meet the Capital Market’s initial listing requirements.

Key Changes

Nasdaq Global Market

Under the current rules, SPACs generally list on the Global Market under the Market Value Standard in Listing Rule 5405(b)(3) because the redeemable nature of their IPO shares results in insufficient stockholders’ equity to qualify under alternative standards.

The amended Listing Rule 5405(b)(3)(A) raises the minimum Market Value of Listed Securities (MVLS) for SPACs to $100 million, up from the $75 million threshold that applies to other companies under the same rule. This aligns with the current MVLS requirement for acquisition companies listing under Rule 5406 and with the New York Stock Exchange’s (NYSE) approach. Notably, unlike SPACs listing under Rule 5406 or NYSE requirements (which permit listing with 300 shareholders), a SPAC listing under Rule 5405(b)(3)(A) must still have at least 400 shareholders.

Nasdaq Capital Market

For the Capital Market, Nasdaq will exclude SPACs from the existing MVLS standard and adopt a new Listing Rule 5505(b)(4) with dedicated SPAC requirements.

• MVLS of at least $75 million.

• Market Value of Unrestricted Publicly Held Shares of at least $20 million (for a company listing in connection with an IPO, this requirement must be satisfied from the offering proceeds).

• At least four registered and active Market Makers.

Nasdaq will also amend Listing Rule 5505(a)(3) to require that Capital Market SPACs have at least 400 public shareholders — up from the 300 Round Lot Holders required of other companies. These new Capital Market requirements are substantially similar to the current Global Market SPAC requirements and consistent with NYSE American’s standards.

Investor Protection Rationale

Nasdaq states that the proposal is consistent with Section 6(b)(5) of the Securities Exchange Act of 1934, which promotes just and equitable trading principles, removes impediments to free and open markets, and protects investors and the public interest. According to Nasdaq, the higher thresholds will help ensure that listed SPAC securities maintain sufficient public float, investor base, and liquidity to support fair and orderly markets.

SPACs will remain subject to existing investor protection requirements, including escrow account obligations, public shareholder approval and redemption rights, and liquidation preferences. They must also comply with Listing Rule IM-5101-2, which requires completion of one or more business combinations within 36 months of the IPO registration statement’s effectiveness and notification to Nasdaq of each proposed business combination.

Effectiveness and SEC Action

The rule change is immediately effective under Section 19(b)(3)(A)(iii) and Rule 19b-4(f)(6). Nasdaq represented that the rule change does not significantly affect investor protection or impose a significant burden on competition. However, the SEC may temporarily suspend the rule at any time within 60 days of the April 15 filing (i.e., by June 14) if it finds suspension necessary or appropriate to protect investors or the public interest. The SEC is soliciting written comments; the notice appeared in the Federal Register on April 27, with a comment deadline of May 18.

Implications for Market Participants

Companies planning a SPAC IPO on Nasdaq should take note of these heightened thresholds. Sponsors and underwriters should confirm that their anticipated offering size and post-IPO market capitalization will meet the new $100 million MVLS requirement for the Global Market or $75 million for the Capital Market. The increased 400-shareholder minimum on both tiers may also affect distribution strategies and IPO structuring.

SPACs that file to list before May 15 may still qualify under the prior, lower thresholds. Sponsors with SPACs in the pipeline should consider expediting their listing applications to take advantage of this transition window.

ArentFox Schiff attorneys are available to answer your questions and help you navigate these updated listing requirements. We will continue to monitor developments, including any SEC action during the 60-day review period ending June 14. Please contact the authors or your AFS attorney for more information.