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Sullivan’s interdisciplinary team combines market-leading capital markets, regulatory and enforcement experience to guide clients through FINRA’s evolving oversight of small-cap offerings and foreign issuer activity, as well as broader regulatory developments impacting small-cap, micro-cap and mid-market market participants.

In response to FINRA’s targeted review of small-cap IPOs and related offerings, Sullivan & Worcester has formed a Small-Firm Task Force to help clients navigate the immediate inquiry and the evolving regulatory landscape. The Task Force unites the firm’s Capital Markets, Regulatory Compliance, Government Investigations and Financial Services Litigation practices, each with deep experience advising issuers, broker-dealers, investment funds and institutional investors operating in the small-cap, micro-cap and mid-market segments.

As the challenges continue to mount for issuers, broker-dealers, and investment firms that are involved in the small- and micro-cap market segments and regulatory scrutiny continues to multiply, the Task Force has broadened its focus to related SEC rulemaking initiatives, exchange listing and compliance developments, and enforcement trends that collectively shape the operating environment for smaller public companies and their advisors. Through comment letters and client advisories, Sullivan’s Small-Firm Task Force serves as a platform for thought leadership and advocacy in this evolving space.

Integrated Capital Markets and Regulatory Experience

Sullivan’s Capital Markets team represents underwriters and issuers in public and private offerings of equity, equity-linked securities and debt, as well as in their routine compliance and related obligations. We have particular experience in IPOs, private investments in public offerings, self-underwritings, registered direct offerings, and convertible and hybrid securities. Our lawyers regularly advise leading small to mid-sized investment banks and corporate clients across a variety of industries including technology, biotech, energy and retail.

Our capital markets attorneys and litigators are routinely paired to ensure compliance from the outset of an engagement and to evaluate potential regulatory, litigation or investigation risks when they arise. The two disciplines routinely interact during the life of a client engagement to ensure that best practices are maintained and periodically evaluated and re-evaluated.

Proactive Regulatory and Compliance Guidance

Sullivan’s Regulatory Compliance Group is a unique interdisciplinary practice focused on regulatory compliance and enforcement, white-collar defense, and investigations before administrative, legislative, and self-regulatory agencies. The Group works closely with the Firm’s Special Investigations & Compliance and Capital Markets teams to assure regulatory compliance—the foundation on which our capital markets clients operate. Our practice preference is proactive: we review clients’ policies and procedures to help anticipate and avoid regulatory red flags, traps and surprises.

Government Investigations and Litigation Capabilities

Our attorneys conduct thorough internal investigations and routinely represent clients before agencies. When necessary, we draw on extensive litigation and trial experience to defend clients in court or agency forums. Sullivan’s transactional and enforcement attorneys work closely together to understand the compliance dynamics and to develop oversight standards informed by experience with the DOJ, SEC, self-regulatory organizations and federal regulators overseeing a variety of financial industries.

Viewpoints
All Viewpoints
SEC to Reconsider Nasdaq’s $5 Million MVLS Rule
On September 11, 2026, the Securities and Exchange Commission (the “SEC”) granted petitions seeking review of the July 22, 2026 delegated approval of Nasdaq’s proposed $5 million Market Value of Listed Securities (“MVLS”) continued listing requirement. The SEC also confirmed that the approval order will remain stayed pending further order of the Commission. Accordingly, the new MVLS requirement is not currently in effect. If ultimately implemented, the rule would permit Nasdaq to issue a Staff Delisting Determination when a listed company’s MVLS remains below $5 million for 30 consecutive business days, without providing a traditional compliance period. The SEC will now review the Division of Trading and Markets’ approval of the proposed rule. The SEC’s order also provides a new opportunity for interested parties to submit written statements supporting or opposing the approval. Statements will be due 21 days after the order is published in the Federal Register. During this period, the rule remains stayed, pending the outcome of the proceeding. Read SEC Release No. 34-106338 For More Information Sullivan & Worcester LLP has been actively involved in advising issuers regarding Nasdaq listing standards, continued listing compliance, capital raising transactions, recapitalizations, exchange matters and SEC regulatory developments. If your company has questions regarding the new MVLS requirement, its potential impact on your continued Nasdaq listing, or available alternatives to address potential compliance concerns, please contact your regular Sullivan & Worcester attorney or any member of our Corporate and Securities Practice Group. This Client Alert has been prepared by David Danovitch, a Partner, Angela Gomes, a Partner, Brendan O'Brien, a Partner, and Phillip Carnevale, an Associate, in the Corporate and Securities practice group of the international law firm of Sullivan & Worcester LLP. For more information, Mr. Danovitch may be reached in our New York office by calling +1 (212) 660-3060 or by email at ddanovitch@sullivanlaw.com; Ms. Gomes may be reached in our Boston office by calling +1 (617) 338-2957 or by email at agomes@sullivanlaw.com; Mr. O'Brien may be reached in our New York office by calling +1 (212) 660-3013 or by email at bobrien@sullivanlaw.com; and Mr. Carnevale may be reached in our New York office by calling +1 (212) 660-3002 or by email at pcarnevale@sullivanlaw.com. This Client Alert is provided for general informational purposes only and does not constitute legal advice.
SEC Approves NYSE and NYSE American $0.25 Minimum Trading Price as Continued Listing Requirement
On August 14, 2026, the Securities and Exchange Commission (SEC) approved proposed rule changes by the New York Stock Exchange LLC (NYSE) and NYSE American LLC (NYSE American) to adopt a new continued listing requirement imposing a minimum trading price of $0.25 per share. This approval follows the SEC’s recent approval of Nasdaq’s new $5 million Market Value of Listed Securities continued listing requirement and reflects a broader trend by the national securities exchanges to tighten continued listing standards for very low-priced and low-market-capitalization issuers.1 Effective July 1, 2027, the new rules are expected to have a particularly significant impact on micro-cap, small-cap and development-stage public companies. Beginning on that date, a NYSE or NYSE American listed security that closes below $0.25 per share on any trading day will be subject to immediate trading suspension and delisting. Overview of the New Requirement Under the approved rules, NYSE and NYSE American will be required to take immediate delisting action if a listed security closes below $0.25 per share on any trading day. This represents a significant change from the exchanges’ historical approach to low-price continued listing deficiencies. For NYSE issuers, the rule amends Section 802.01C of the NYSE Listed Company Manual. For NYSE American issuers, the rule amends Section 1003 of the NYSE American Company Guide. If a security closes below $0.25 per share: the applicable exchange will immediately suspend trading; the exchange will commence delisting proceedings; the issuer will not be eligible to submit a compliance plan or receive a cure period for that deficiency; and the issuer may appeal the delisting determination in accordance with the applicable exchange rules. This represents a significant departure from the traditional approach to many continued listing deficiencies, which often provide issuers with a period to regain compliance while remaining listed. SEC’s Rationale for Approval The SEC approved the rules on an accelerated basis after considering comments from market participants and the exchanges’ stated concerns regarding very low-priced securities. The exchanges argued that securities trading at extremely low prices may be more susceptible to volatility and market manipulation and may raise concerns regarding the maintenance of fair and orderly markets. The SEC agreed that the rules are reasonably designed to address investor protection and market integrity concerns. In its analysis, the SEC noted that securities falling below the $0.25 threshold historically showed a significant likelihood of continuing to trade below that level and, in many cases, were later delisted for other quantitative continued listing deficiencies. At the same time, the SEC acknowledged comments raising concerns that an automatic suspension and delisting trigger could affect issuers experiencing temporary market dislocation or short-term trading pressure. The SEC nevertheless concluded that the delayed effective date and the exchanges’ continuing appeal procedures supported approval. Practical Impact for Listed Companies The new minimum trading price requirement creates a material compliance consideration for NYSE and NYSE American issuers, particularly micro-cap, small-cap, development-stage and capital-intensive companies whose securities trade near or below $1.00 per share. Unlike NYSE’s existing $1.00 average closing price requirement and Nasdaq’s existing $1.00 minimum bid price requirement, both of which generally provide issuers with a period to regain compliance, the new NYSE and NYSE American $0.25 threshold provides no cure period before suspension and delisting proceedings are initiated. NYSE or NYSE American listed issuers should also consider the rule together with other exchange requirements and limitations, including rules relating to reverse stock splits, market capitalization, stockholders’ equity, market value of publicly held shares, public float and shareholder approval requirements. For many smaller issuers, addressing minimum trading price concerns may require advance planning and should not be left until the issuer is already approaching the $0.25 threshold. What Public Companies Should Do Now NYSE and NYSE American listed issuers whose securities trade at low prices should evaluate the potential impact of the new rule before the effective date. Companies should consider: monitoring closing trading prices on an ongoing basis, and reviewing exchange compliance holistically, including market capitalization, equity, and public float requirements; assessing whether the company may be at risk of approaching the $0.25 threshold; evaluating timing and corporate approvals for a potential reverse stock split; considering capital raising or strategic alternatives where appropriate; and developing contingency plans in the event the company’s trading price deteriorates, including considering the potential consequences of a trading suspension, delisting and a possible transition to the OTC market. The delayed effective date of July 1, 2027 is intended to provide affected issuers with time to take proactive steps, including by seeking shareholder approval for a reverse stock split where required. Once effective, however, the rule will not provide for a traditional compliance plan or cure period. * * * * * * * * If you would like further information regarding the new listing standards discussed in this Client Alert or related exchange compliance matters, please contact the lawyer at Sullivan & Worcester LLP with whom you regularly consult, or any of the lawyers listed above. This Client Alert is provided for general informational purposes only and does not constitute legal advice. 1 The SEC’s July 22, 2026 approval of Nasdaq’s $5 million Market Value of Listed Securities continued listing requirement is currently stayed pending further Commission review. For additional information, see Sullivan & Worcester LLP, SEC Stays Approval of Nasdaq’s $5 Million MVLS Continued Listing Requirement Pending Commission Review (August 3, 2026).
SEC Turns the Spotlight On Nasdaq Delisting Standards
David Danovitch was quoted in the article "SEC Turns the Spotlight on Nasdaq Delisting Standards," published by Law360 [sub. req'd] on May 1, 2026. The article discusses the U.S. Securities and Exchange Commission’s decision to delay implementation of proposed Nasdaq delisting standards to allow for additional public comment, following concerns that the changes could expose smaller companies to market abuse and limit their ability to appeal delisting decisions. “It’s not the norm,” David says, referring to the SEC’s decision to pause its review. “And I think it reflects the fact that the comments, particularly the comments in opposition or expressing concern about the proposal’s implementation, gave the SEC quite a lot to think about,” he adds.
SEC, FINRA Cross-Border Crackdown Typifies Trump 2.0 Priorities
David Danovitch was quoted in the article "SEC, FINRA Cross-Border Crackdown Typifies Trump 2.0 Priorities," published by Bloomberg Law on November 4, 2025. The article discusses the growing US regulatory focus by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) on foreign issuers, aiming to crack down on fraud involving overseas companies listing on US exchanges. The approach is in keeping with the Trump administration’s general position toward Chinese businesses and other international competitors.   “There were parties basically hijacking IPOs and using them as vehicles for a pump-and-dump,” David says, referring to foreign issuers reporting questionably large returns despite a lack of sales activity to support such figures.  Nasdaq has proposed rules that would require companies based in China to raise at least $25 million in public offering proceeds to qualify for new listings, under the reasoning that a larger IPO would be more difficult to manipulate. “These are small firms, so our concern is that this could bankrupt a few firms or inhibit their ability to comply properly,” David comments. “You want your regulators to root out the crime and make sure investors here aren’t getting hurt.”

Small-Firm Task Force