NYSE American Proposes Tightening Initial Listing Liquidity Standards to Align with Nasdaq Framework

On January 8, 2026, NYSE American LLC filed a proposed rule change with the SEC to amend the provisions of the NYSE American Company Guide governing initial listing standards. If approved, the amendments would represent a significant tightening of NYSE American’s initial listing framework, narrowing historical differences between NYSE American and Nasdaq, particularly with respect to liquidity, public float composition, and minimum price requirements.

Historically, NYSE American’s initial listing standards have been perceived as more flexible than Nasdaq’s, particularly for smaller capitalization or earlier-stage companies. Under the current framework, calculations of aggregate market value of publicly held securities, or “public float,” may include shares subject to resale restrictions so long as they are not held by insiders or 10% holders.

Companies listing in connection with IPOs have been permitted to rely in part on previously issued non-insider shares to meet public float and market value thresholds. Minimum initial listing prices also vary by standard and may be as low as $2.00 or $3.00 per share. The proposed amendments to the NYSE American Company Guide alter each of these standards.

NEW DEFINITIONS AND FOCUS ON UNRESTRICTED PUBLICLY-HELD SHARES

A key structural element of NYSE American’s proposal is the introduction of four interlocking definitions to the Company Guide, each modeled substantially on Nasdaq Stock Market Rule 5005(a), which sets the baseline Nasdaq definitions uses to determine “public float,” or liquidity, requirements for initial listings of securities.

These definitions would reshape how NYSE American assesses liquidity requirements by focusing on whether shares are publicly held and freely transferable at the time of initial listing:

• “Publicly-Held Shares” consist of issued and outstanding shares (which includes those represented by American Depository Receipts) excluding shares held by directors, officers, their immediate family members, and any holder of 10% or more of outstanding shares. Securities held by a 10% holder are treated as per se not publicly held, regardless of whether the holder would be considered an affiliate under federal securities laws.[1]
• “Restricted Securities” further narrow the public float and include any securities subject to resale restrictions “for any reason.” This category includes securities issued in unregistered offerings, as employee equity awards, in offshore Regulation S offerings, securities subject to lockup agreements or similar contractual restrictions, and securities considered restricted securities under Rule 144 under the Securities Act of 1933, as amended. The definition extends beyond traditional Rule 144 concepts and emphasizes actual transferability rather than registration status alone.
• “Unrestricted Securities” are securities that are not “restricted securities” and generally consist of shares that are freely tradable on the date of listing without contractual, regulatory, or statutory resale limitations.

• “Unrestricted Publicly-Held Shares” combine these concepts and represent publicly held shares that are also unrestricted securities. This combined category is the operative metric for the revised liquidity tests. To be counted toward initial listing requirements, a share must be held outside insider and 10% holder positions and must be immediately freely transferable.

REVISED PUBLIC FLOAT STANDARDS ACROSS INITIAL LISTING STANDARDS 1–4

Section 101 of the Company Guide currently sets out four different standards for initial listings on the NYSE American:

• Standard 1: Pre-tax income from continuing operations of $750,000 in the last fiscal year, $3 million of public float, $4 million of stockholders’ equity, and a minimum price of $3.00 per share
• Standard 2: $15 million of public float, $4 million of stockholders’ equity, a minimum price of $3.00 per share, and two year of operating history
• Standard 3: $50 million of market capitalization, $15 million of public float, $4 million of stockholders’ equity, and a minimum price of $2.00 per share
• Standard 4: $75 million of market capitalization or $75 million of each of total assets and total revenue in either the last fiscal year or two of the last three most recent fiscal years, $20 million of public float, and a minimum price of $3.00 per share

Under NYSE American’s proposal, each of the four initial listing standards in Section 101 would be amended to require a minimum market value of Unrestricted Publicly-Held shares at the $15 million level for standards 1, 2, and 3, and $20 million for standard 4. Any company listing in connection with an IPO or other underwritten public offering would be required to satisfy the Unrestricted Publicly-Held Shares requirement solely from offering proceeds. “Restricted Securities,” even if not held by insiders or 10% holders, would no longer count toward satisfaction of this requirement.  

As a result, shares sold in secondary transactions by selling stockholders, even if registered on the same registration statement filed for the initial listing, generally would be excluded in the calculation of unrestricted publicly held shares for initial listing purposes, including in cases where a controlling stockholder’s sale may increase actual public float.

This explicit exclusion of secondary shares sold in the IPO from public float calculation appears to be a more stringent standard than Nasdaq’s approach, as Nasdaq retains the discretion to include such shares upon review of the listing application as a whole.

This change significantly increases the practical importance of offering size requirements and limits issuers’ ability to structure smaller primary offerings while relying on outstanding securities to satisfy listing requirements.

MINIMUM INITIAL LISTING PRICE RAISED TO $4.00

NYSE American’s proposal would also impose a uniform $4.00 minimum initial listing price across all initial listing standards. This represents an increase from current NYSE American requirements, which permit minimum initial listing prices of $2.00 or $3.00 per share depending on the applicable listing standard.

The proposed $4.00 threshold is intended to align NYSE American’s price standard with NYSE initial listing standards, Nasdaq Capital Market standards applicable to issuers not seeking to rely on the penny stock exception, and the $4.00 price threshold embedded in Rule 3a51-1(a)(2)(i)(C) under the Securities Exchange Act of 1934, as amended (Exchange Act), which excludes certain exchange-listed securities from the definition of penny stock if, among other things, the exchange has initial listing standards that require an initial listing price of $4.00 per share.

The NYSE’s proposal expressly notes this overlap, framing the $4.00 requirement as both a market quality measure and a means of aligning NYSE American–listed securities with the federal penny stock regulatory framework.

AMENDMENTS TO INITIAL LISTING STANDARDS 3 AND 4

NYSE American’s proposal tightens the application of initial listing standards 3 and 4 by clarifying how total market capitalization and price requirements apply to companies that are already publicly traded, including issuers currently traded over-the-counter and companies transferring from another exchange.

Applicants under standards 3 and 4 would be required to meet the applicable total market capitalization threshold for 90 consecutive trading days prior to applying for listing as well as satisfy the $4.00 minimum price requirement over that same period. This approach mirrors the NYSE’s Global Market Capitalization Test and Nasdaq’s Market Value of Listed Securities Standard, further converging standards among exchange listing regimes.

PRACTICAL IMPLICATIONS

If adopted, the proposed amendments would have meaningful implications for companies planning to list on NYSE American.

Historically, issuers have chosen NYSE American in part because its initial listing standards offered greater flexibility than those of Nasdaq, particularly with respect to liquidity, public float composition, and the ability to rely on legacy or resale shares to satisfy listing requirements. Such flexibility has made NYSE American an attractive venue for smaller or earlier-stage companies, companies with significant insider or employee ownership, and issuers seeking to limit dilution by keeping primary offerings smaller at the time of listing.

The proposed changes would significantly narrow that flexibility. Employee equity and other outstanding shares would no longer support initial listing eligibility as shares issued under employee equity plans, shares subject to lockups, or other restricted securities would not count toward initial listing liquidity thresholds.

Issuers listing in connection with an IPO would need to size their offerings to independently satisfy the $15 million market value of unrestricted publicly held shares requirement, potentially requiring larger primary offerings and resulting in increased dilution. Further, by requiring liquidity thresholds to be met using only unrestricted publicly held shares, the proposal would reduce the ability of issuers to structure listings around resale or legacy float and further narrow the practical differences between NYSE American and Nasdaq with respect to initial listing liquidity standards.

The NYSE American’s proposal reflects a broader shift toward listing frameworks that prioritize freely tradable liquidity at the commencement of trading, with the stated objectives of promoting more orderly markets, reducing volatility, and enhancing investor protection.

EFFECTIVE DATE

The proposed amendments will not take effect unless and until the SEC approves them. The proposal was filed under Section 19(b)(2) of the Exchange Act and must be published for public comment and affirmatively approved by the SEC before becoming effective.

Following publication in the Federal Register, the SEC generally has 45 days (which may be extended to up to 90 days) to approve the proposal, disapprove it, or begin a separate proceeding to determine whether it should be disapproved.

If the proposal is approved, the NYSE has not proposed a delayed implementation period, meaning the revised standards could apply to listing applications submitted shortly after the approval becomes effective. Companies considering a NYSE American listing in 2026 should therefore closely monitor the SEC review process and consider its potential impact on transaction timing, offering size, and equity structure.