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On July 29, 2026, the Securities and Exchange Commission (the "SEC") notified Nasdaq that it had received notices of intention to petition for review of the SEC's July 22, 2026 order approving Nasdaq's proposed rule change requiring listed companies to maintain a minimum Market Value of Listed Securities ("MVLS") of $5 million. Pursuant to Rule 431(e) of the SEC's Rules of Practice, the July 22, 2026 approval order has been stayed pending further review.

As discussed in our July 23, 2026 client alert, the approved rule established a new continued listing standard applicable to companies listed on the Nasdaq Capital Market, Nasdaq Global Market and Nasdaq Global Select Market. Under the approved rule, issuers that failed to maintain an MVLS of at least $5 million for 30 consecutive business days would become subject to immediate delisting procedures without the benefit of a traditional cure period.

The Effect of the Stay

The SEC's July 29, 2026 letter does not reverse or vacate the July 22, 2026 approval of the rule. Rather, it temporarily suspends the effectiveness of that order. According to the SEC, the stay will remain in effect "until the Commission orders otherwise."

As a result, the implementation of Nasdaq's new $5 million MVLS continued listing requirement is currently on hold. Until the SEC takes further action, market participants should monitor developments regarding the review process and any subsequent order.

Practical Considerations for Nasdaq Issuers

Despite the stay, Nasdaq-listed companies that may be affected by the proposed MVLS requirement should continue to evaluate their compliance position and consider the potential impact of the rule should it ultimately become effective. In particular, issuers that may be at risk of falling below the proposed $5 million MVLS requirement should closely monitor whether, if the stay is lifted, any period following the July 22, 2026 approval order will count toward the rule's 30 consecutive business day requirement.

We will continue to monitor developments and provide updates as additional information becomes available.

For More Information

If you would like additional information regarding the SEC's stay of Nasdaq's proposed $5 million MVLS continued listing requirement, the ongoing review process, Nasdaq listing standards generally, or the implications of these developments for your company, please contact the Sullivan & Worcester lawyer with whom you regularly work or any of the attorneys listed below.

This Client Alert is provided for general informational purposes only and does not constitute legal advice.