On July 22, 2026, the U.S. Securities and Exchange Commission (“SEC”) approved a significant new rule that raises the bar for companies seeking to remain listed on Nasdaq. The new requirement — centered on a minimum Market Value of Listed Securities (“MVLS”) threshold — is designed to protect investors from manipulation and market disorder associated with low-priced stocks.
In adopting the new rule, Nasdaq “…observed that some companies, typically those facing conditions related to financial distress or prolonged operational downturn, are unable to regain compliance with continued listing requirements for the long-term, and as a result the market may assign low market values to such companies”. Nasdaq believes “…that when the market identifies significant problems in a company by assigning a very low market value, the company is no longer appropriate for continued listing and trading on Nasdaq because the challenges facing such a company, generally, are not temporary and may be so severe that the company is unlikely to regain compliance within the compliance period or maintain compliance thereafter”.
SEC data revealed a dramatic rise in non-compliant issuers — from 2 in 2021 to a peak of 140 in 2023. Though the numbers declined in subsequent years (122 issuers in 2024 and 91 issuers in 2025), the numbers remained significantly above historical levels.
Immediate Suspension and Delisting – No Cure Period
The new rule, which was originally filed by Nasdaq in January 2026, adopts a new MLVS continued listing requirement of at least $5 million. The rule requires companies listed on the Nasdaq Global Select Market, the Nasdaq Global Market and the Nasdaq Capital Market to maintain a minimum MVLS of at least $5 million, and provides that companies failing to comply with this requirement for a period of 30 consecutive business days will be immediately subject to suspension and delisting, without any cure or compliance period (as it typically granted to issuers that fail to maintain compliance with other continued listing standards such as Nasdaq’s minimum bid price requirement).
Hearings Panel
The final rule adopted provides that a Nasdaq Hearings Panel may reverse a delisting decision where it determines the delisting determination was in error, or grant an exception for a period not to exceed 180 days from the delisting determination for the company to demonstrate that it meets all requirements for initial listing in an effort to balance Nasdaq’s obligation to protect investors against the recognition that some companies' difficulties are temporary.
No Stay of Trading Pending an Appeal
A timely request for a hearing will not stay the suspension of the securities from trading pending the issuance of a decision from the Nasdaq Hearings Panel where the company received a delisting notice due to a failure to comply with the MVLS Requirement. While companies may appeal the delisting notification to the Nasdaq Hearings Panel, their securities will generally trade in the OTC Market while the appeal is pending.
The Bottom Line
This rule represents a tightening of Nasdaq's continued listing standards. For companies hovering near the $5 million MVLS threshold, the message is clear: sustained low market valuation is now an independent delisting risk, with no built-in cushion of a compliance period.
In addition to the $5 million MVLS threshold, companies listed on Nasdaq must continue to satisfy Nasdaq’s other continued listing requirements including, but not limited to:
- Bid Price. A company triggers a Nasdaq minimum bid price deficiency when its stock closes below $1.00 per share for 30 consecutive business days. Upon notification of the delinquency from Nasdaq, such company has 180 calendar days to regain compliance — with the possibility of a second 180-day period, at Nasdaq’s discretion. Compliance is achieved by maintaining a closing bid price of at least $1.00 for 10 consecutive business days, subject to extension by Nasdaq. While a deficiency notice does not immediately affect a company's listing, any stock that has a closing bid price of $0.10 or less for 10 consecutive business days will be suspended from trading on Nasdaq.
- Stockholders Equity. To meet Nasdaq's continued listing requirements, a company must maintain a minimum of $2.5 million of stockholder’s equity.
Companies at or near the $5 million MVLS should monitor their MVLS closely, and if necessary, prepare to pursue a Nasdaq Hearings Panel appeal — bearing in mind that their shares will be moved to the OTC Market in the meantime and that any reinstatement may require meeting the higher initial listing standards. Companies confronting Nasdaq deficiency challenges should consult with experienced legal and financial advisors promptly, and our firm is available to assist.