On January 13, 2026, Nasdaq filed a proposed rule change with the SEC that would impose a new continued listing requirement requiring all Nasdaq Global Market and Nasdaq Capital Market companies to maintain a minimum Market Value of Listed Securities of at least $5 million.

This proposal is part of a steady and deliberate shift Nasdaq has been making over the past several years to tighten its oversight of smaller public companies and to more quickly remove from the market issuers that, in Nasdaq’s view, no longer meet baseline viability.

Other recent Nasdaq initiatives include: (i) an amendment to grant Nasdaq discretionary authority to deny listings based on activity by outside third parties associated with a company including advisors (see HERE); (ii) amendments to increase minimum listing standards for China based companies (see HERE) ; (iii)  amendments to accelerate the suspension and delisting of a company that falls below any of the numeric listing requirements, including the bid price, market value of public float, equity, income and total assets/revenue requirements, and that has a Market Value of Listed Securities (“MVLS”) below $5 million (see HERE); (iv) amendments to its liquidity listing standards for the Nasdaq Capital Market and Nasdaq Global Market to increase the minimum Market Value of Unrestricted Publicly Held Shares (“MVUPHS”) requirement for those companies listing under the net income standard from $5 million to $15 million (see HERE); (v) amendments to accelerate the delisting of $0.10 stocks (see HERE); (vi) amendments requiring that MVUPHS can only be satisfied through IPO proceeds and that shares registered for resale may no longer be counted (see HERE); (vii) a amendments accelerating the de-listing process for companies that fail to regain compliance with the minimum bid price requirements following a second compliance period and for securities that have had a reverse stock split over the prior one-year period (see HERE); and (viii) rule changes tightening up the ability to use a reverse split to meet the minimum price where such split would result in non-compliance with other Nasdaq listing standards such as the minimum number of round lot holders or public float requirements (see HERE).

This latest proposal continues that trend, and in several important respects accelerates the consequences for companies that fall below Nasdaq’s minimum thresholds.

Nasdaq Proposal

Nasdaq is proposing to adopt new Listing Rules 5450(a)(3) and 5550(a)(6), which would require companies listed on the Nasdaq Global Market (including the Global Select Market) and the Nasdaq Capital Market, respectively, to maintain a Market Value of Listed Securities of at least $5 million.

Market Value of Listed Securities is calculated based on the consolidated closing bid price multiplied by the number of listed securities, as defined in existing Nasdaq rules.

While Nasdaq already has several market value-based continued listing standards, this proposal is notable because it would create a hard floor below which Nasdaq believes continued listing is no longer appropriate. Generally, only those securities relying on the “Market Value of Listed Securities Standard” for listing are required to maintain a minimum Market Value of Listed Securities as a continued listing requirement ($35 Million for Nasdaq Capital Markets and $50 Million for Nasdaq Global Markets).  If a company falls below one of those standards they will receive a notice of non-compliance and extensive opportunity to cure, and can also jump to a different standard such as the equity standard or net income standard if they meet those requirements.  This new rule would add a hard floor with accelerated delisting.  For a review of Nasdaq’s continued listing requirements see – HERE).

Nasdaq is also proposing to amend Rule 5810, to suspend trading and immediately delist from Nasdaq securities of companies that do not satisfy the proposed new requirements

Immediate Suspension and Delisting – No Compliance Period

Perhaps the most significant aspect of the proposal is not the $5 million threshold itself, but the enforcement mechanics.

Under the proposed rules, a company that falls below the $5 million Market Value of Listed Securities threshold for 30 consecutive business days would be subject to an immediate Staff Delisting Determination. Unlike many other continued listing deficiencies, no compliance period would be available. Nasdaq would immediately suspend trading in the company’s securities upon issuing the delisting determination.  For my three part blog on Nasdaq listing deficiencies and delisting processes see HERE; HERE; and HERE.

Nasdaq is explicitly rejecting the notion that these companies should be afforded time to regain compliance, stating that once the market assigns such a low valuation, the issues are typically not temporary and are unlikely to be resolved within a reasonable period.

This reflects Nasdaq’s increasingly firm view that extended compliance periods for deeply distressed small-cap companies do not serve investor protection or market quality objectives.

No Trading Stay Pending a Hearing

The proposal also materially changes the hearing process.

While companies would still have the right to appeal a Staff Delisting Determination to a Nasdaq Hearings Panel, a timely request for a hearing would not stay the trading suspension. In other words, the securities would remain suspended from Nasdaq trading during the appeal process, and during that time trading would generally occur, if at all, in the over-the-counter markets.

Nasdaq’s stated rationale is that maintaining fair and orderly markets for securities with such low market value is difficult, and that continued trading on Nasdaq during an appeal is not appropriate in these circumstances.

Severely Limited Hearings Panel Discretion

The proposal also significantly limits what a Hearings Panel may consider in reviewing these cases.

Under the amended rules, the Hearings Panel would be permitted to reverse a delisting determination only if it finds that Nasdaq Staff made a factual error and that the company never actually fell below the $5 million threshold.

The Panel would not be permitted to grant the company additional time to regain compliance or consider evidence that the company has since regained compliance after the deficiency occurred.

This aligns these cases with other situations where Nasdaq has already constrained panel discretion, including certain SPAC-related failures and post-business-combination listing deficiencies.

Looking Ahead

The proposal will be subject to SEC review and public comment, but it is consistent with both Nasdaq’s recent rulemaking trajectory and similar actions taken by other exchanges.

Companies, boards, and advisors should view this not as an isolated rule change, but as part of Nasdaq’s broader effort to recalibrate its market toward issuers that demonstrate sustained investor interest, trading liquidity, and long-term viability.

As always, the time to address these issues is before a deficiency arises—not after Nasdaq Staff has already reached a conclusion.