Although I have been blogging about the numerous Nasdaq rule amendments and proposals, in light of the fast pace in changes, I think it will be helpful to include a breakdown of all of the amendments in this single blog.
New Nasdaq IM-5101-4 – De-Listing Following an SEC Trading Suspension
On June 3, 2026, the SEC approved Nasdaq listing rule IM-5101-4, which provides Nasdaq with the authority to delist a security where the SEC has previously suspended trading and Nasdaq determines it appropriate and in the public interest to do so. For my blog on the final rule, see HERE. This link also includes the list of factors Nasdaq will consider in making a de-listing determination.
New Nasdaq IM-5101-3 – Expansion of Discretionary Authority to Deny Initial Listing Applications
In December 2025 Nasdaq enacted new IM-5101-3 granting it the authority to deny initial listing applications, even where the applicant meets all stated listing requirements. The rule substantially expands Nasdaq’s prior discretion, allowing it to look at outside factors, including associations with third parties, unrelated to the company itself. IM-5101-3 was used to effectively shut down the small cap IPO market place dropping the total number of small cap IPOs from 23 in Q4 of 2025 to a mere 5 in Q-1 2026. The good news is that Q2 is seeing a small uptick – but not nearly close to historical levels.
For a detailed summary of the new rule, including the list of factors Nasdaq will consider in making a de-listing determination, see HERE.
New Nasdaq Rule 5210(1)(i) – Listing Standards for China Based Companies
In May 2026, Nasdaq adopted new Rule 5210(1)(i) adding additional listing criteria for companies primarily operating in China, including Hong Kong and Macau. The new rule requires that a company that is a “China-based Issuer” as defined in the rule, and is conducting an IPO, must offer a minimum amount of securities in a Firm Commitment Offering, that will result in gross proceeds to the company of at least $25 million.
In the case of a business combination (reverse merger), the new rule requires that a China-based Issuer have a minimum Market Value of Unrestricted Publicly Held Shares equal to at least $25 million. Market Value of Unrestricted Publicly Held Shares excludes securities subject to resale restrictions from the calculation of Publicly Held Shares.
In the case of a Direct Listing, the new rule requires that a China-based Issuer meet all the requirements for a listing on the Nasdaq Global Select Market and will only be allowed to list on that tier. That is, even if a China-based company would meet the listing requirements for a direct listing on the Nasdaq Capital or Nasdaq Global Markets, it will only be allowed to apply for and list on the Nasdaq Global Select Market with its more arduous listing and continued listing standards.
In the case of an uplisting from OTC Markets or similar transfer from another trading venue, the new rule requires that a China-based Issuer first season on OTC Markets (or other exchange) for a minimum of 12 months prior to being eligible to list on Nasdaq. In addition, like the requirement for companies listing in connection with a business combination, these seasoned companies must have a minimum Market Value of Unrestricted Publicly Held Shares of at least $25 million.
A company’s business will be considered to be principally administered in a jurisdiction based on the analysis of the facts and circumstances, including if: (1) the company’s books and records are located in such jurisdiction; (2) at least 50% of the company’s assets are located in such jurisdiction; (3) at least 50% of the company’s revenues are derived from such jurisdiction; (4) at least 50% of the company’s directors are citizens of, or reside in, such jurisdiction; (5) at least 50% of the company’s officers are citizens of, or reside in, such jurisdiction; (6) at least 50% of the company’s employees are based in such jurisdiction; or (7) the company is controlled by, or under common control with, one or more persons or entities that are citizens of, reside in, or whose business is headquartered, incorporated, or principally administered in such jurisdiction.
For a review of the rule proposal see HERE.
Amendments to Rules 5405 and 5505 – Increasing Listing Requirements Under the Net Income Standard
In December 2025, amended listing Rules 5405 and 5505 Nasdaq increased the initial listing requirements for companies seeking to list on the Nasdaq Capital Markets or Global Markets using the net income standard such that the minimum “Market Value of Unrestricted Publicly Held Shares” must be $15 million each. Previously the standard for the Nasdaq Capital Markets was $5 million and for Global Markets was $8 million.
The final adopted rule was substantially as proposed as detailed HERE.
Amended Rule 5810- De-listing of Security with a Closing Bid Price Below $0.10
In December 2025 Nasdaq modified Rule 5810 allowing it to immediately delist a company whose securities do not maintain a closing bid price of greater than $0.10 for 10 consecutive days. Nasdaq Rule 5810 already provided that if a company’s security is already in a compliance period for non-compliance with the Bid Price Requirement and thereafter has a closing bid price of $0.10 or less for 10 consecutive trading days (“Low Price Requirement”), Nasdaq must issue a Staff Delisting Determination with respect to that security, notwithstanding any otherwise available compliance period.
The modified rule provides that a failure to meet the continued listing requirement for minimum bid price shall be determined to exist if a company’s security has a closing bid price of $0.10 or less for ten consecutive business days, regardless of whether the company is under any compliance period.
Amendments to Rules 5405 and 5505 – Market Value of Unrestricted Publicly Held Shares Can Only be Satisfied with New Offering Proceeds
In March 2025, Nasdaq amended Listing Rules 5405 and 5505 modifying the listing requirements for Nasdaq Capital Markets and Global Markets, such that a company listing in connection with an IPO, including a foreign private issuer registering ADRs, must satisfy the Market Value of Unrestricted Publicly Held Shares (MVUPHS) requirement for an initial listing solely with the proceeds of the offering. Previously issued shares registered for resale can no longer be counted as unrestricted publicly held shares in the calculation of MVUPHS.
The final adopted rule was substantially as proposed as detailed HERE.
Amended Rules 5810 and 5815 – Accelerating De-Listing After a Second Compliance Period and Reverse Split
In January 2025 Nasdaq adopted amendments to Rules 5810 and 5815 allowing it to accelerate the delisting 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.
Under the amended rules, a company’s trading on Nasdaq will be suspended if the company has been non-compliant with the bid price requirements ($1.00) for more than 360 days. Further, the rule provides that that Nasdaq will immediately send a Delisting Determination, as defined in Rule 5805(h), without any compliance period, to any company that becomes non-compliant with the $1.00 minimum bid price requirement if the company effected a reverse stock split within the prior one-year period.
Amended Rule 5810 – Accelerating De-Listing Where a Reverse Split Results in Other Non-Compliance
In October 2024, Nasdaq amended Rule 5810 to for an accelerated delisting process where a listed company uses a reverse split to regain compliance with the bid price requirement for continued listing, but that as a result of the reverse split, 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.
For a detailed review of the final rule, see HERE.
Amended Rule 5210 – All Lead Underwriters Must be Nasdaq Members
In March 2024, Nasdaq amended Rule 5210 requiring that all lead underwriters on an IPO must be Nasdaq members or limited underwriting members as a prerequisite to applying for a listing. For a review of the final rule, see HERE.
Proposed Amendment to Rules 5450 and 5550 – Automatic Delisting For Companies Whose Market Cap Falls Below $5 Million for 30 Consecutive Business Days
Nasdaq has proposed 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. 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 certain delisting proceedings. The proposed rule has gone through several modifications – and until recently, would have resulted in an immediate Staff Delisting Determination. As of the date of this blog, the proposed rule has been modified such that the Hearings Panel would have the discretion to, where appropriate, grant an exception for a company to regain compliance by demonstrating within 180 days that the company meets all initial listing requirements. Under the proposal a company would still receive a Staff Delisting Determination, but such determination could be appealed and the company granted a 180 day extension to achieve compliance. However, the appeal would not suspend the delisting and accordingly, a company would trade on OTC Markets during the appeals process.
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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