SEC Stays Nasdaq’s New $5 Million MVLS Listing Standard Pending Commission Review

On July 29, 2026, the Securities and Exchange Commission (“SEC”) announced that it stayed its July 22, 2026 order (Release No. 34-105971) approving The Nasdaq Stock Market LLC’s (“Nasdaq’s”) rule proposal to adopt a new continued listing standard requiring listed companies to maintain a minimum Market Value of Listed Securities (“MVLS”) of at least $5 million. This new MVLS standard represents a significant change from Nasdaq’s other continued listing standards because it does not provide a customary cure or compliance period. For now, that standard is on hold, but boards of small-cap and micro-cap Nasdaq companies should understand why the stay happened, what could come next, and how to prepare.

How the stay came about: The stay is procedural and temporary, not a substantive ruling against the rule. It was automatically triggered after the Small Public Company Coalition (“SPCC”) and Cemtrex each filed notices of their intent to ask the SEC to review the Division of Trading and Markets’ approval of the rule: the SPCC on the basis that it represents small public companies affected by the rule and participated extensively in the rulemaking process, and Cemtrex on the basis that its MVLS is already below the proposed $5 million threshold and the rule could subject it to suspension and delisting. Pursuant to Rule 431(e) of the SEC’s Rules of Practice, these filings automatically stayed the rule approval pending further SEC action. The petitioners now have five days to file their formal petitions for review setting forth the basis for challenging the approval. The rule could still be revived and take effect if the SEC ultimately denies those petitions or otherwise reinstates the approval. 

Why small-cap issuers on Nasdaq should pay attention: If the new MVLS requirement takes effect, small and micro-cap or financially distressed issuers on Nasdaq will face a heightened risk of delisting, and the absence of a cure period means that a company that receives a delisting notice from Nasdaq for failing to maintain a $5 million MVLS for 30 consecutive business days must meet the Nasdaq’s more stringent initial listing requirements to regain listing compliance. A company can appeal a delisting determination to a Nasdaq hearing panel, but the appeal will not stay the suspension of trading on Nasdaq. Instead, the company’s securities will trade over-the-counter (OTC) pending the hearing panel’s decision. The hearing panel may reverse a delisting determination, in its sole determination, if it finds that Nasdaq staff made an error, or grant an exception of up to 180 days for the company to demonstrate that it meets all applicable initial listing requirements.

What Boards should do now: Boards should consider developing contingency plans now in case the rule ultimately goes into effect. Examples include:

• Monitoring the company’s MVLS and modeling how close it sits to the $5 million threshold under various market scenarios.
• Understanding the mechanics and timeline of a potential delisting notice, the hearing panel appeal process, and the consequences of a move to OTC trading.
• Evaluating in advance what it would take to satisfy Nasdaq’s initial listing requirements, since that is the standard the company would need to meet to regain listing compliance.
• Tracking the SEC review process, including the petitions for review and any subsequent SEC action, to anticipate when and whether the rule may take effect.

Boards that engage with these questions now will be better positioned to respond quickly if the SEC ultimately allows the $5 million MVLS standard to move forward.