Introduction 

On July 22, 2026, the Securities and Exchange Commission (the “SEC”) issued an order approving Nasdaq’s proposed rule change published at the beginning of this year, as amended in June 2026, requiring companies listed on the Nasdaq Global Select Market, Nasdaq Global Market and Nasdaq Capital Market to maintain a minimum Market Value of Listed Securities (“MVLS”) of at least $5 million (new Rules 5450(a)(3) and 5550(a)(6)).[1] MVLS is calculated as the consolidated closing bid price multiplied by the total number of listed securities. On July 29, 2026, the SEC’s Division of Trading and Markets confirmed that it had received notices of intention to petition the full SEC for review of the approval, which automatically stayed the order implementing the rule pending further action from the SEC. As there is no prescribed timeline for SEC action, we are monitoring developments closely and will provide updates as the process unfolds.

If the rule is affirmed by the SEC, a listed company that fails to maintain a minimum MVLS of at least $5 million for 30 consecutive business days will be immediately subject to suspension and delisting without eligibility to receive a cure or compliance period before receiving a Staff Delisting Determination letter. The rule is notable because, unlike most other continued listing deficiencies, there is no compliance period, no cure window, and no automatic stay of trading suspension while an appeal is pending. The rule represents Nasdaq’s continued efforts to tighten its listing and trading standards to improve market quality and protect investors, particularly targeting microcap and development-stage companies with low-priced securities.

Key Highlights

• New $5 million MVLS Requirement. All Nasdaq-listed issues would be required maintain a minimum MVLS of $5 million.
• Immediate Suspension Upon Deficiency. Failure to maintain the $5 million minimum MVLS for 30 consecutive business days triggers an immediate Staff Delisting Determination.
• No Stay Pending Appeal. Unlike other Nasdaq listing deficiencies (e.g., Minimum Bid Price Requirement), requesting a hearing before a Hearings Panel will not stay the suspension of trading and securities will typically move to the OTC market pending any appeal.
• Hearings Panel Relief is Limited. The Hearings Panel may reverse a determination if made in error or grant a one-time exception of up to 180 calendar days only if a company demonstrates it can meet Nasdaq’s initial listing requirements (which are more burdensome than continued listing requirements) versus regaining compliance with the $5 million MVLS requirement.
• Bright-Line Standard. The $5 million MVLS requirement is a hard, objective trigger and there will be no discretion at the staff level for forbearance or relief from its requirements.
• SEC Rationale. The SEC noted that low-MVLS securities are more susceptible to manipulation and that most issuers falling below the $5 million MVLS threshold for 30 days still had a deficient MVLS 180 days later. The SEC and Nasdaq considered but rejected several objections in comment letters that the rule disproportionately targets and impacts microcap and emerging companies.

What This Means for Your Company

Although the rule is currently stayed and not being enforced, companies with market capitalizations near or below the $5 million MVLS threshold should continue to monitor developments closely and use this window to prepare. If the stay is lifted or the rule is later reinstated (in its current or modified form), it would still impose no cure periods and no stay of a trading suspension pending appeal, so proactive contingency planning now, while the rule is on hold, can help companies respond quickly.

Options for Addressing a Potential MVLS Shortfall

Since MVLS is calculated as stock price multiplied by total listed securities, some common fixes for other listing deficiencies, most notably a reverse stock split, will not cure an MVLS shortfall since a reverse stock split will increase the per-share stock price but proportionately reduce the outstanding share count, which leaves overall market value unchanged.

• Monitor MVLS Continuously and Act Early. Since the 30 consecutive business day trigger runs automatically and there is no cure period once triggered, tracking MVLS on an ongoing basis will allow a company to pursue corrective measures before a deficiency arises, rather than after a Staff Delisting Determination is issued.
• Raise additional equity capital. MVLS represents total market value so a properly structured capital raise that increases the number of listed securities will directly increase MVLS, even without a corresponding increase in share price.
• Organic Stock Price Support. Enhancing investor relations efforts, expanding analyst or market-maker coverage and business or operational improvements can have a positive impact on market prices thereby increasing MVLS without dilution.
• Consider Strategic Transactions. A merger, acquisition or other business combination will increase a company’s overall market value and may help maintain or restore compliance with the $5 million MVLS requirement.
• Develop a Hearings Panel Strategy. Since a Hearings Panel may only grant relief if a company can demonstrate compliance with initial listing requirements (and not merely a $5 million MVLS), companies at risk should assess early whether they could satisfy such standards so that a compelling case can be presented quickly to the Hearings Panel if a Staff Delisting Determination is issued.

Get in Touch

This alert is for informational purposes only and does not constitute legal advice. Please contact your relationship attorney to discuss how this development may affect your company.

If you have questions about the new MVLS requirement, or would like assistance assessing your company’s listing profile, preparing for an IPO, business combination, or other Nasdaq listing event, or developing a strategy for maintaining compliance with Nasdaq’s continued listing standards, please reach out to a member of our Corporate Group. We regularly advise issuers, boards, and other market participants on these issues and are glad to provide practical guidance tailored to your specific situation.

For more information on the topics covered in this alert, please contact one of the attorneys listed below.