Spotify AB is expected to receive approval from the Securities and Exchange Commission to move forward with a listing of its shares on the New York Stock Exchange, a key step in the music-streaming service’s plan to avoid a traditional initial public offering.

Spotify plans to list its shares on the NYSE using an unusual method known as a direct listing. Before it can do so, the exchange must win approval from the SEC to change its rules. The NYSE has applied for such a change and the SEC has indicated to Spotify it’s likely to approve, people familiar with the situation said.

The Swedish company was valued at $8.5 billion during a private capital injection in 2015. Its valuation is now closer to $20 billion, based on a recent share swap between Spotify and Chinese internet giant Tencent Holdings Ltd., some of the people said. Spotify has been targeting March or April for its debut, according to people familiar with the matter.

The SEC has not yet made an official decision on the NYSE’s proposal. It could potentially reject it or ask for further amendments. Spotify could also still change its mind and decide to delay or even not move forward with a direct listing.

If the debut goes well, it could encourage other highly valued and cash-rich startups like Airbnb Inc. to pursue direct listings, people familiar with the matter have said.