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Frequently Asked Questions
  What does Nasdaq require from a company planning an IPO on The Nasdaq Capital Market to demonstrate that it complies with the minimum shareholder requirement?
Identification Number 1732
In the case of a company seeking to list on The Nasdaq Capital Market in conjunction with an IPO, Nasdaq requires a written representation from the lead underwriter that the underwriter will undertake to distribute the company’s securities in a manner to satisfy the minimum shareholder requirement upon completion of the proposed offering.
 
Specifically, the representation should state that the underwriter will undertake to place the securities sold in the offering with a sufficient number of holders so that the company will have at least 300 round lot shareholders (i.e., shareholders holding a minimum of 100 unrestricted securities) with at least 150 of those shareholders holding a minimum of $2,500 worth of unrestricted securities.
 
In addition, under Nasdaq’s discretionary authority pursuant to IM-5101-1, Nasdaq may request that a company provide evidence that it complied with the minimum round lot shareholder requirement within 15 calendar days of its listing date.  This evidence, if requested, should demonstrate compliance as of the first trading date or the closing date of the IPO and may consist of an underwriter’s allocation list which identifies the number of accounts that were allocated shares by each member of the underwriter syndicate.  The allocation list does not need to identify accounts by name.   Alternatively, a company may provide a shareholder list.  Companies wishing to use another form of confirmation should contact their Listing Qualifications Analyst to determine if it is acceptable to Nasdaq. 
Publication Date*: 7/23/2020 Mailto Link Identification Number: 1732
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