On September 3, 2025, Nasdaq proposed 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. On the same day, Nasdaq proposed 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).
This follows a series of final and proposed rule amendments increasing liquidity standards and accelerating delisting processes for small cap listed companies including: (i) an April rule amendment requiring that MVUPHS can only be satisfied through IPO proceeds and that shares registered for resale may no longer be counted (see HERE); (ii) a recent rule amendment 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); (iii) 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); and (iv) a proposed amendment to the minimum bid price rules to accelerate the delisting process for securities whose price falls below $0.10 (see HERE).
Background
Like the listing standards, Nasdaq rules have minimum quantitative and qualitative standards for a company to maintain a listing. For a review of the continued listing requirements for each tier of Nasdaq, see HERE. Companies that fall below any of these standards will receive one of three different types of deficiency notices including: (i) deficiencies resulting in immediate delisting determinations; (ii) deficiencies that allow a company to submit a plan of compliance for Nasdaq review; and (iii) deficiencies that provide for an automatic cure/compliance period. For my three part blog series drilling down on these processes, see HERE; HERE; and HERE.
Generally, the numeric ongoing listing requirements including bid price, market value of public float, equity, income and total assets/revenue requirements all allow for an automatic cure and compliance period of 180 days with the ability to apply for an additional 180-day extension. If a delisting determination is made at the end of the 360 day period, a company may generally appeal through a hearing panel process and continue to trade during this appeal process. Further, a hearing panel can then grant an additional 180 day compliance period (starting from the 360th day).
There are various exceptions that allow Nasdaq to accelerate delisting and not grant compliance periods. For example, Nasdaq allows for accelerated delisting processes for non-compliance with the bid-price requirements, without applicable compliance periods, in particular circumstances. Nasdaq Rule 5810 and 5815 provides that Nasdaq may issue a delisting determination, despite any otherwise available compliance period, if: (i) a company’s security has a closing bid price of $0.10 or less for 10 consecutive trading days (“Low-Priced Stock”); (ii) a company fails to meet the bid price requirement and the company has effected one or more reverse stock splits over the prior two year period with a cumulative ratio of 250 shares or more to one; (iii) where a listed company takes action, such as a reverse split, to regain compliance with the bid price requirement for continued listing, but that as a result of the action, the company falls below other listing standards, such as the minimum number of round lot holders, or minimum number of shares in the publicly held float; or (iv) a company fails to meet the bid price requirement and the company has effected a reverse stock split within the prior one-year period.
Nasdaq is now proposing to add a sweeping new exception obfuscating compliance periods and allowing for the accelerated trading suspension and delisting of certain low value securities.
Proposed Amendment
As noted, Nasdaq has both initial and continued listing requirements which vary based on both the tier of Nasdaq for which listing is sought and the standard used to apply. For example, Nasdaq Capital Markets requires a $50 million Market Value of Listed Securities (MVLS) for companies applying under the Market Value of Listed Securities standard. Nasdaq Capital Markets has not assigned a required MVLS value for companies seeking to list under either the Equity or Net Income Standards.
For companies listed under the Market Value of Listed Securities standard, Nasdaq requires a minimum $35 million in MVLS for continued listing and like the initial listing standard, has not assigned a value for continued listing under either the Equity or Net Income Standard. A company that lists initially under one standard may continue to list if it meets the continued listing requirements under any of the other standards and as such, MVLS is rarely a cause for delisting.
Nasdaq is now proposing to provide for the suspension from Nasdaq trading and immediate delisting (rather than providing a compliance period) of any company that becomes non-compliant with a numeric listing requirement, 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 of less than $5 million for 10 consecutive trading days. To effectuate the proposal Nasdaq would amend Listing Rule 5810 to add an additional type of deficiency that results in immediate delisting and suspension from trading.
Although a company would still be able to appeal a suspension and delisting notice under the proposed new rules, it would trade on OTC Markets pending the process. The Nasdaq hearing panel would have the authority to find the company is in compliance with all applicable listing standards and reinstate trading on Nasdaq
The Author
Laura Anthony, Esq.
Founding Partner
Anthony, Linder & Cacomanolis
A Corporate and Securities Law Firm
Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony, Linder & Cacomanolis, PLLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALC legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Ms. Anthony is a member of various professional organizations including the Crowdfunding Professional Association (CfPA), Palm Beach County Bar Association, the Florida Bar Association, the American Bar Association and the ABA committees on Federal Securities Regulations and Private Equity and Venture Capital. She is a supporter of several community charities including the American Red Cross for Palm Beach and Martin Counties, Susan Komen Foundation, Opportunity, Inc., New Hope Charities, the Society of the Four Arts, the Norton Museum of Art, Palm Beach County Zoo Society, the Kravis Center for the Performing Arts and several others.
Ms. Anthony is an honors graduate from Florida State University College of Law and has been practicing law since 1993.
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