SEC Approves New $5 Million Market Value of Listed Securities Requirement for Nasdaq-Listed Companies

On July 22, 2026, the Securities and Exchange Commission (the “SEC”) approved a Nasdaq proposal establishing a new continued listing requirement that all Nasdaq-listed companies maintain a minimum Market Value of Listed Securities (“MVLS”) of $5 million. The new requirement applies to companies listed on the Nasdaq Global Select Market, Nasdaq Global Market and Nasdaq Capital Market.

The rule represents a significant tightening of Nasdaq’s continued listing standards, particularly for smaller-cap and development-stage issuers. Unlike most existing Nasdaq continued listing deficiencies, companies that fail to satisfy the new MVLS standard will not receive a compliance period and will be subject to immediate suspension and delisting proceedings after 30 consecutive business days below the threshold. In addition, a company that appeals a delisting determination generally will not be permitted to continue trading on Nasdaq during the appeal process.

You can read the SEC’s full order here.

Key Takeaways

• Requires all Nasdaq-listed companies to maintain a minimum MVLS of $5 million.
• Triggers an immediate Staff Delisting Determination if a company’s MVLS remains below $5 million for 30 consecutive business days.
• Removes the automatic stay of suspension pending review by a Nasdaq Hearings Panel.
• Permits a Hearings Panel, in limited circumstances, to grant up to 180 days for a company to satisfy Nasdaq’s initial listing standards.

The New MVLS Requirement

Under the newly approved Rules 5450(a)(3) and 5550(a)(6), issuers listed on Nasdaq’s Global Select, Global Market and Capital Market tiers are required to maintain an MVLS of at least $5 million on an ongoing basis. MVLS is calculated by multiplying a company’s consolidated closing bid price by the number of listed securities outstanding.

Nasdaq argued, and the SEC ultimately agreed, that companies maintaining an MVLS below $5 million for a sustained period frequently exhibit signs of financial distress, are more likely to become noncompliant with other listing standards, and may be more susceptible to manipulative trading activity because of their relatively small market capitalization. In approving the proposal, the SEC cited data showing that approximately 65% of issuers that would have failed the proposed standard historically remained below the $5 million threshold 180 days later, with a median valuation of less than $3.7 million. The SEC concluded that companies trading below the threshold for a sustained period often experience broader listing-compliance concerns and may present heightened investor-protection and market-integrity risks.

Immediate Delisting Consequences

Under the new rules, if a company’s MVLS remains below $5 million for 30 consecutive business days, Nasdaq staff will issue a Staff Delisting Determination and the company’s securities will become immediately subject to suspension and delisting. Unlike many existing Nasdaq continued listing deficiencies, the issuer will not receive a compliance period or opportunity to submit a compliance plan before the Staff Delisting Determination is issued.

Appeal Rights and Hearings Panel Review

A company subject to a Staff Delisting Determination may still request a hearing before a Nasdaq Hearings Panel. However, a timely hearing request will not stay the suspension of trading. Securities generally will trade in the over-the-counter market while the appeal remains pending.

Following significant public comments, Nasdaq modified its original proposal to provide the Hearings Panel with limited discretion to grant relief. Under the final rule, the Panel may reverse a Staff Delisting Determination if it was issued in error or grant an exception period of up to 180 days for a company to demonstrate compliance with Nasdaq’s initial listing standards. While the amendment preserves a pathway for companies experiencing temporary valuation declines, companies seeking relief must satisfy Nasdaq’s more stringent initial listing requirements rather than merely regaining compliance with continued listing standards.

Practical Implications for Nasdaq-Listed Companies

Companies approaching the $5 million MVLS threshold should closely monitor MVLS compliance as part of their regular Nasdaq listing reviews. Given the absence of a compliance period and the possibility of immediate trading suspension, issuers should consider financing alternatives, strategic transactions and other capital markets initiatives before a deficiency arises.

Companies should also evaluate contingency plans for maintaining exchange listing and understand the implications of a potential transition to over-the-counter trading if Nasdaq suspension occurs.

If you have questions, please contact one of Honigman’s Capital Markets and Securities attorneys.