On January 13, 2026, The Nasdaq Stock Market LLC (“Nasdaq”) posted a proposed rule on its website that, if approved, would require companies listed on the Nasdaq Global Market and the Nasdaq Capital Market to maintain a minimum market value of listed securities of at least $5 million (the “MVLS Requirement”). Under the proposed rule, if a company fails to meet the MVLS Requirement for 30 consecutive business days, its securities would be suspended and immediately delisted from Nasdaq, even if it is appealing a delisting determination to a Nasdaq Listing Qualifications Hearings Panel (the “Panel”). The proposed rule would also restrict the Panel’s ability to reverse a delisting determination, limiting reversals to situations where there was an error and the company never actually failed to satisfy the MVLS Requirement. The Panel would also not be able to consider any facts indicating that company subsequently regained compliance with the MVLS Requirement or grant a company any additional time to regain compliance.
In the proposed rule, Nasdaq stated its belief that once the market identifies significant problems in a company by assigning a very low market value, that company is no longer appropriate for continued listing and trading on Nasdaq because challenges facing such companies, generally, are not temporary and may be so severe that the company is not likely to regain compliance within a compliance period and sustain compliance for an extended period of time.
Several comment letters have been submitted in opposition of the proposed rule, indicating that the proposed rule, if approved, would make it more difficult for small- and micro-cap companies to maintain their listing on Nasdaq and have access to the public markets. Some comment letters pointed out that the proposed rule could even encourage manipulative trading practices in the securities of companies with low market capitalizations, since short-sellers would have an incentive to keep the trading price of a security low and trigger a delisting when the company fails to meet the $5 million MVLS Requirement for 30 business days.
Below is a chart outlining current and proposed continued listing requirements for the Nasdaq Global Market and the Nasdaq Capital Market:
| Continued Listing Requirement | Capital Market | Global Market |
| Minimum Bid Price | $1.00 | $1.00 |
| Public Holders | >300 | >400 |
| Publicly Held Shares | 500,000 | Depends on Continued Listing Standard |
| Market Value of Publicly Held Shares | $1 million | Depends on Continued Listing Standards |
| MVLS Requirement (if approved) | $5 million | $5 million |
| Market Makers | 2 | Depends on Continued Listing Standard |
As discussed in our LEGALcurrents, over the last twenty months Nasdaq has implemented stricter listing standards for companies with securities listed on the Nasdaq Global Market and the Nasdaq Capital Market, the market tiers more accommodating to emerging growth, small- and micro-cap companies. This proposed rule continues the trend of accelerating the delisting of companies with low market caps, including those that have completed reverse stock splits but have been able to keep their securities listed on Nasdaq. The proposed rule is also likely to limit reverse takeover transactions for Nasdaq-listed companies.
On March 11, 2026 the Securities and Exchange Commission (“SEC”) designated a longer period to take action on the proposed rule to ensure that it has sufficient time to consider the proposed rule. As a result, the SEC announced that a decision on the proposed rule will be made by April 29, 2026. We will continue to monitor the status of the proposed rule. If you have any questions about Nasdaq’s proposed rule, please contact a member of Harter Secrest & Emery LLP’s Securities and Capital Markets group.