DealLawyers.com Blog

August 10, 2018

SPACs: Nasdaq & NYSE Pull Proposed Listing Changes

Last October, we blogged about a Nasdaq proposal to ease the listing requirements for SPACs. The NYSE put forward a similar proposal in November.  However,  This Olshan blog says that the exchanges have backed off those rule proposals. Here’s the intro:

Last month, both the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (Nasdaq) withdrew proposals that sought to ease the listing rules for blank check companies, also known as special purpose acquisition companies or SPACs. The proposals would have, among other things, reduced the minimum number of round lot holders (holders of 100 or more shares) required for initial listing from 300 to 150. Each Exchange also wanted to eliminate the continued listing requirement of at least 300 round-lot holders that applies until the SPAC makes one or more acquisitions. Nasdaq first submitted its proposal in September 2017 and the NYSE submitted its proposal in November 2017.

The Securities and Exchange Commission (SEC) had sought additional analysis for both proposals. The round-lot requirements are intended to ensure that public companies have a sufficient investor base to permit stable trading while limiting price volatility. The SEC requested additional information from the Exchanges to confirm that the proposals would not upset this balance. Neither Exchange offered an explanation as to why it withdrew its proposal.

John Jenkins