The U.S. Securities and Exchange Commission has cleared the way for Spotify AB to pursue its reported direct listing on the New York Stock Exchange.
On Feb. 2, Wall Street's chief regulator approved the New York Stock Exchange's proposal to begin offering direct listings as a fast track for companies to go public, according to an SEC filing.
Direct listings allow companies to avoid many of the hoops, and costs, associated with a traditional initial public offering, including using an underwriter to support the shares.
Instead, a company undergoing a direct listing would seemingly switch its shares to the public markets overnight. The model would not allow companies to raise funds through their going-public process, making well-capitalized companies better suited for it.
Swedish music-streaming giant Spotify has reportedly expressed interest in pursuing the model on the Intercontinental Exchange Inc.-owned New York Stock Exchange. Spotify's reported direct listing has led to speculation among industry participants that if the listing goes well, it could encourage other private companies to also use the route to go public.
