Nasdaq filed a proposed rule with the SEC to let companies raise capital while also doing direct listings instead of initial public offerings.
Currently, the Securities and Exchange Commission does not allow companies to raise new capital while going through the direct listing process. Unlike IPOs, direct listings allow companies to participate in the stock market without selling new shares and with fewer restrictions and fees.
The proposed rule filed Monday would allow a company that has not previously had its common equity securities registered with the SEC to list those common equity securities on the Nasdaq Global Select Market upon the effective date of a registration statement. The company itself will sell shares in the opening auction on the first day of trading on the exchange, Nasdaq noted in its filing.
To determine the initial listing of a company, Nasdaq said it would base its calculations off a price range provided by issuer in its registration statement. Nasdaq would calculate the value of shares using a price per share equal to the price that is 20% below the lowest price in the issuer's price range. Nasdaq also will determine whether the company has met the applicable bid price and market capitalization requirements based on the same per share price.
A company's share price would not be able to open more than 20% below the range, but there is no limit on how much above the range it could be, Nasdaq noted.
In December, the SEC rejected a proposal from the New York Stock Exchange with similar intent, but in June, the NYSE filed another attempt with the SEC.