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On February 17, 2026, Sullivan & Worcester submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) in response to Release No. 34-104688; File No. SR-NASDAQ-2026-004, concerning Nasdaq’s proposal to adopt a new continued listing requirement mandating that companies maintain a minimum Market Value of Listed Securities of $5 million.

The letter, authored by Partners David Danovitch, Angela Gomes and Brendan O’Brien, reflects the firm’s extensive experience advising middle-market, small-cap and micro-cap public companies, as well as investment banks and investors active in these markets. 

Nasdaq’s proposal would require issuers to maintain at least $5 million in Market Value of Listed Securities for 30 consecutive business days and would impose immediate suspension and delisting for companies that fall below that threshold, without providing a compliance or cure period.

Sullivan’s comments emphasize that market value is largely driven by market forces outside an issuer’s control, including volatility, macroeconomic conditions and trading dynamics. The firm noted that, unlike other Nasdaq listing standards that provide grace periods to regain compliance, the proposed rule would impose a rigid 30-day measurement period with limited recourse.

The letter further explains that the proposal could disproportionately impact micro-cap and small-cap issuers, particularly those with stable, long-term shareholder bases and lower trading volumes. Sullivan also cautioned that automatic delisting to over-the-counter markets could harm retail investors by reducing liquidity, transparency and governance protections.

This submission aligns with the firm’s broader focus on the evolving regulatory landscape affecting smaller public companies. As recently reflected in the formation of Sullivan’s interdisciplinary Small-Firm Task Force, the firm continues to draw on its capital markets, regulatory and enforcement experience to guide clients operating in the small-cap, micro-cap and mid-market segments.

For these reasons, Sullivan urged the SEC to disapprove the proposal in its current form or require meaningful modifications to mitigate unintended consequences for issuers and investors.