Nasdaq has proposed a significant change to its continued listing standards that would impose a new minimum market value requirement on companies listed on the Nasdaq Global Market and the Nasdaq Capital Market. If adopted, the proposal would require each listed issuer to maintain a minimum “Market Value of Listed Securities” (“MVLS”) of at least $5 million and would require Nasdaq to suspend trading and delist issuers that remain below that threshold for 30 consecutive business days. The proposal is the latest in a series of Nasdaq initiatives directed at tightening listing and continued listing standards for smaller issuers.
Nasdaq filed the proposed rule change with the U.S. Securities and Exchange Commission (the “SEC”) on January 13, 2026, pursuant to Section 19(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). The proposal will not become effective unless and until it is approved by the SEC; however, the comment period expired on February 19, 2026.
Overview of the Proposed MVLS Requirement
The core of the proposal is the adoption of new continued listing requirements that would apply across Nasdaq’s Global and Capital Markets. Nasdaq proposes to adopt new Listing Rule 5450(a)(3) and Listing Rule 5550(a)(6) to require listed companies to maintain MVLS of at least $5 million. MVLS is based on Nasdaq’s rulebook definitions of “Market Value” and “Listed Securities.” “Market Value” is defined as the consolidated closing bid price multiplied by the measure to be valued, and “Listed Securities” means securities listed on Nasdaq or another national securities exchange. As a result, MVLS is intended to capture the aggregate market value of an issuer’s Nasdaq-listed equity securities, and, where an issuer has more than one class or series of equity security listed on Nasdaq, MVLS would generally take into account each such listed class or series using the applicable consolidated closing bid price and the number of outstanding securities of that class or series, with the values aggregated.
Under the proposal, if an issuer’s MVLS remains below $5 million for 30 consecutive business days, Nasdaq would issue a Staff Delisting Determination, and the issuer’s securities would be immediately subject to trading suspension and delisting. Unlike many existing Nasdaq continued listing deficiencies that provide a compliance period to regain compliance, the proposal would provide no cure period once the 30 consecutive business day threshold is met. Nasdaq’s filing explains that while an issuer may request a hearing, a hearing request would not stay the suspension, and the scope of the hearing would be limited largely to whether Nasdaq staff made a factual error in determining that the issuer failed to meet the new MVLS requirement for the required period.
Considerations for Issuers
For companies assessing the potential impact of the proposal, the proposal presents two distinct timing considerations: uncertainty regarding when the SEC may approve the rule and the strict operation of the issuer’s day count under the proposed standard once it becomes effective. From a regulatory perspective, the proposal remains subject to SEC review and could be approved, disapproved, or modified through the SEC’s rule filing process. Although the timing and final terms of any SEC approval remain unclear, from an issuer’s perspective, the proposed rule leaves little margin for delay once a company’s MVLS begins to approach the $5 million threshold, particularly because compliance will depend in large part on market conditions that may be outside the company’s control. The proposal’s reliance on a 30-consecutive-business-day MVLS test requires issuers to treat the end of that measurement period as a hard compliance deadline. Once non-compliance with the 30-consecutive-business-day threshold occurs, the current proposal gives Nasdaq no discretion, and the issuer will be immediately suspended and delisted. Accordingly, issuers trading below or near the $5 million threshold should actively monitor MVLS on a daily basis, understand how Nasdaq counts consecutive business days, and be prepared to evaluate and implement response strategies well before the measurement period begins rather than waiting for the 30 business-day period to elapse since there are no appeals or compliance periods in the traditional continued listing standards.
Compliance Measures
If the proposal is approved, it would represent a meaningful shift in Nasdaq’s approach to continued listing compliance for issuers on these exchanges. The elimination of a traditional cure period and the lack of a stay pending appeal would significantly compress the timeframe in which companies can respond to sustained declines in market value, increasing the importance of advance planning and coordinated execution. Sullivan urges all issuers that are in danger of breaching the $5 million threshold to get in front of this new standard and seek to ensure a compliance buffer sooner than later.
