Earlier this year, the SEC approved a Nasdaq proposal to revise its initial listing standards to improve liquidity in the market. (See this PubCo post.) As amended, the initial criteria for listing on any Nasdaq tier were revised to exclude “restricted securities” from the calculations of the required minimum number of publicly held shares, market value of publicly held shares and round lot holders, given that restricted securities are not freely transferable and are generally illiquid. Nasdaq also added new definitions for “restricted securities,” “unrestricted publicly held shares” and “unrestricted securities.” As a result of these changes, only securities that are “freely transferable” are included as publicly held shares for purposes of satisfying the initial listing criteria. No changes were proposed to the continued listing requirements at that time. Now, however, Nasdaq has proposed to address the comparable liquidity issue for listed companies.