SEC Reviewing Nasdaq's $5 Million Market Value Continued Listing Requirement
The Securities and Exchange Commission (SEC) stayed an approval order on August 6, 2026, regarding a Nasdaq rule change that imposes a new minimum Market Value of Listed Securities (MVLS) requirement of $5 million for all companies listed on the Nasdaq Global Select Market, Nasdaq Global Market, and Nasdaq Capital Market. The commission had approved the rule change on July 22 but paused the proposal after opposition pushback. Unlike most continued listing deficiencies, a breach of the $5 million threshold triggers trading suspension and delisting proceedings with no cure or compliance period.
Background
Previously, Nasdaq's continued listing framework required companies to, among other metrics, satisfy minimum thresholds for bid price and market value of publicly held shares; however, there was no standalone minimum requirement for total MVLS. Now, MVLS (the product of a security's consolidated closing bid price and its total exchange-listed shares) must be at least $5 million.
Nasdaq filed the proposed rule change on January 13, 2026, and subsequently amended the proposal on June 18, 2026. The $5 million MVLS requirement is designed to protect investors from the heightened susceptibility to fraud and manipulative trading that low-value securities often face, while still preserving an avenue for companies whose decline in market value is only temporary to demonstrate that continued listing remains appropriate. The SEC approved the rule as amended, effective as of the SEC's July 22, 2026, approval.
The New MVLS Requirement and Its Consequences
The rule change establishes the following framework:
- Minimum Threshold: All Nasdaq-listed companies must maintain MVLS of at least $5 million on a continuous basis.
- Automatic Deficiency: If a company's MVLS falls below $5 million for 30 consecutive business days, Nasdaq will issue a Staff Delisting Determination and immediately suspend trading in the security.
- No Cure Period: Unlike other deficiencies, there is no cure or compliance period to regain the $5 million MVLS level. The deficiency results in immediate delisting proceedings.
- No Automatic Stay on Trading Suspension: A timely request for a Hearings Panel review does not stay the suspension of trading (unlike most other listing deficiencies).
- Limited Hearings Panel Relief: The Panel may only (1) reverse the determination if made in error or (2) grant an exception of up to 180 days for the company to demonstrate compliance with Nasdaq's initial listing requirements—which are more stringent than continued listing standards.
Key Takeaways
- Nasdaq-listed companies will face a new, standalone market value compliance requirement. Companies with declining market values will need to closely monitor MVLS levels to identify potential issues before triggering delisting proceedings.
- The lack of a cure period will make early action critical. Unlike other Nasdaq deficiencies, companies that fall below the $5 million MVLS threshold cannot rely on additional time to regain compliance before suspension and delisting proceedings begin.
- Boards and management teams need to incorporate MVLS monitoring into ongoing compliance processes. Establishing regular tracking and escalation procedures can help companies evaluate potential solutions before a deficiency becomes more difficult to address.
For more information on the SEC's stay concerning the Nasdaq's $5 million MVLS continued listing requirement, please contact Jack Bowling, Cooper Hilton or the Stinson LLP contact with whom you regularly work.
