Exchange Listings: Rule and Infrastructure Watchlist for Late-Stage and Public Companies

• Effective May 15, Nasdaq raised the threshold for special purpose acquisition companies (SPACs) using the market-value standard on the Nasdaq Global Market and created a tougher path for SPACs on the Nasdaq Capital Market. Read this May 6 CapitalXchange blog for more detail.  
• Effective June 14, Nasdaq tightened initial listing criteria for companies it defines as “China-based Issuers.” For covered IPOs, the rule generally requires at least $25 million in gross proceeds from US public holders in a firm commitment offering, with corresponding requirements for deSPACs, direct listings, uplistings and exchange transfers. Read this August 5 CapitalXchange blog for more detail.

NYSE American, a smaller but established exchange that focuses on small-cap companies, adopted amendments to increase quantitative initial listing standards. Key changes include:

• Stating that the market value of publicly held shares requirement must be met only on the basis of unrestricted publicly held shares. The calculation excludes shares restricted from resale for any reason and certain shares acquired from the issuer or an affiliate. This approach is similar to Nasdaq’s, following 2025 amendments we wrote about in this Cooley PubCo blog.
• Requiring IPO listings to have at least $15 million in market value of unrestricted publicly held shares, which must be satisfied solely from offering proceeds.
• Requiring a minimum stock price of $4 per share.
• Requiring companies transferring from another exchange or the over-the-counter (OTC) market to meet the applicable total market capitalization requirement and the stock price requirement for 90 consecutive trading days prior to applying for listing.
• Requiring stockholders’ equity of at least $5 million under Initial Listing Standard 2.

The amended rules, which went into effect in March 2026, retain four alternative initial listing standards. Companies considering an NYSE American listing should make sure their listing models reflect the current standards.

NYSE, meanwhile, proposed a change aimed at easing the path to listing in connection with an IPO, carve-out or spinoff. If approved, the amendment will extend the transition period for establishing an internal audit function from one year to five years. This is still more stringent than Nasdaq, which does not expressly require listed companies to maintain an internal audit function. That said, public companies must still build appropriate internal controls and comply with applicable Sarbanes-Oxley requirements. Oftentimes, having an internal audit team can be a practical way to support those processes. Read this August 27 blog on The Governance Beat for more detail.

The SEC approved Nasdaq Rule IM-5101-4 in June. It allows Nasdaq, on a case-by-case basis, to delist a security after an SEC Section 12(k) trading suspension, when trading indicates potential manipulation and Nasdaq determines delisting is necessary to protect investors. It can apply even if the company satisfies Nasdaq’s numerical standards or the suspected manipulation involves unrelated third parties.

I wrote in this January 15 CapitalXchange blog that Nasdaq wanted to require listed securities to maintain a market cap of at least $5 million. As amended, Nasdaq’s proposed rule stated that companies that fell below the threshold for 30 consecutive business days would face immediate suspension and delisting, with the possibility of an exception if a company can show to the Nasdaq Hearings Panel, within 180 days from the date of the delisting determination, that it meets all initial listing requirements.

Although the SEC’s Division of Trading and Markets approved the rule in July, affected parties petitioned the Commission to review the Division’s order, which triggered an automatic stay that continues as of this writing. This is one of the petitions. The SEC has not yet indicated whether it will review the approval, and there is no required timeframe for it to act. If the SEC denies review or ultimately upholds the Division’s approval, the petitioner could seek judicial review, so it could be some time before this is resolved. The bottom line is that the new standard is not operative right now, but companies near the threshold should continue to monitor its status.

• Under amended NYSE rules and amended NYSE American rules that the SEC recently approved, listed companies will face immediate suspension and commencement of delisting proceedings if the closing price falls below $0.25 on any trading day.
• For NYSE, the amendment raises the floor and formalizes accelerated delisting under the current framework, where companies trading below $0.10 per share are subject to “prompt” suspension and delisting procedures.
• For NYSE American, the amendment updates a principles-based approach to low-priced stocks. Under the current framework, as described in the exchange’s rule proposal, NYSE American generally initiates suspension and delisting procedures when a listed security falls below $0.10 per share. However, the $0.10 trigger is not formally codified, and, under the current rules, delisting decisions are based on the facts and circumstances, including factors like market conditions and management’s plans.
• Additionally, the rules of both exchanges retain processes for suspension and delisting even when a security’s per-share trading price has not fallen below $0.25:
  • When a security’s average closing price falls below $1 over a consecutive 30-day trading period (for NYSE; more principles-based for NYSE American).
  • When the per-share trading price drops significantly, to an abnormally low level from which the exchange believes it is unlikely to recover.
• At-risk companies should assess whether a reverse stock split to increase their per-share trading price is available and appropriate before the July 1, 2027, effective date.
• Nasdaq adopted a similar rule last year, which went into effect in January 2026 following SEC approval. Nasdaq’s rule accelerates the delisting process when securities have a closing bid price at or below $0.10 for 10 consecutive business days. Read this January 15 CapitalXchange blog for more detail.

As noted above, NYSE American adopted amendments that increase quantitative initial listing standards. These amendments also clarify which shares to exclude under continued listing thresholds for publicly held shares and shareholders. The numerical thresholds did not change, and neither did the general concept of the rule – excluding shares held by officers, directors and 10% holders.

The SEC has approved Nasdaq’s move to 23-hour, five-day trading, expected to begin December 6, subject to industry readiness and related rule changes. Nasdaq has posted FAQs; see this July 29 Governance Beat blog.

Nasdaq also posted FAQs on its amended rule for trading halts, which will apply to specified corporate actions, including ticker/CUSIP changes, stock splits, significant dividends and mergers. As I explained in this August 19 CapitalXchange blog, the amended trading halt rule will take effect with 23/5 trading and simply preserves market participants’ overnight processing window for the specified actions. It does not change listing standards for companies.

Other primary listing exchanges are expected to implement similar trading halts for applicable listed securities, even if they are not currently extending their own trading hours. This reflects that 23/5 trading is an industrywide shift. Companies should track rule changes at their primary exchange and stay generally informed of changes to market practice.  

Nasdaq and several NYSE exchanges have adopted rules that will permit eligible securities to trade in tokenized form, using DTC to clear and settle the positions, once the necessary DTC infrastructure is live. In this pilot program, DTC participants – broker-dealers, banks and custodians holding securities through DTC for themselves or their customers – choose whether eligible DTC-custodied positions are represented in tokenized form, without action by the issuing company. This would create an alternative way to represent positions in the DTC system, but according to DTC, it would not change the relationships among DTC, participants, issuers and beneficial owners or the ownership rights attached to the securities.

For companies, the DTC pilot is an early test of tokenization and there will be more to watch if the technology continues to move forward. The SEC also recently proposed modernizing its transfer-agent rules to expressly contemplate electronic and blockchain-based recordkeeping, including circumstances where distributed ledger technology is used in maintaining the official securityholder record. As I explained in this March 3 CapitalXchange blog, issuer-sponsored tokens could bring benefits. But other tokenization models could have the opposite effect, by adding another layer between companies and their beneficial owners. The impact will depend on who issues the token, whether governance rights travel with it and whether intermediaries remain involved in recordkeeping.

“Y’all Street” is not yet on the same footing as Wall Street – but Texas now has an independent exchange and Texas-branded venues from NYSE and Nasdaq. For companies looking to get more connected to the Lone Star State, there are a few alternatives to watch:

• The Texas Stock Exchange (TXSE), which is owned by an investor consortium that includes several large, well-known institutions, began trading securities in July under unlisted trading privileges. That means a company’s shares can trade there without the company choosing TXSE as a listing venue. TXSE targets October 2026 for its first primary corporate listings, and it is already making bold moves. For example, it has proposed proportional voting for broker nonvotes – a recent blog from The Governance Beat summarizes that proposal and its potential impact. Whether TXSE’s approach is approved, encourages corporate listings or affects broader market practice remains to be seen.
• NYSE Texas is part of the NYSE family and offers dual listing, allowing a company to retain its primary NYSE or Nasdaq listing while applying for a formal secondary listing on NYSE Texas. NYSE Texas is a fully electronic national securities exchange that is headquartered in Dallas. It is being marketed as an opportunity to build community with other Texas-listed companies.
• Nasdaq Texas launched dual listings in March 2026. Similar to NYSE Texas, adding a dual listing does not by itself change governance structures or SEC reporting obligations, or involve the issuance of new shares. Rather, it involves a company establishing a formal second exchange relationship, which comes with its own listing agreement and compliance obligations.