Nasdaq’s $5 Million Rule: The Practical Compromise Nobody Is Talking About

Mel Robbins wrote a book called The Let Them Theory, and the idea behind it is simple enough. Stop burning energy trying to control what other people are determined to do. Let them. Then take that energy and put it toward the part you can actually control, which she calls “Let Me.”

I have been thinking about that book while watching the fight over Nasdaq’s $5 million continued listing rule, because the industry has spent most of this year doing the opposite.

Nasdaq filed the rule in January. The SEC’s staff, acting under delegated authority, approved it on July 22. Eight days later, the approval was stayed on procedural grounds. On September 11, the full Commission granted review on the merits, and the rule remains stayed while that review proceeds. Throughout all this, everyone has been writing letters. The small public company community wrote letters opposing it. Market makers, trade associations, and investor advocates wrote letters supporting it. I have been to conferences where both sides made their case to rooms full of people who already agreed with them.

People have been writing letters at each other. They have not been having many conversations with each other.

So let me try something different, and let me start by giving away most of the argument.

Let Them Have It

I do not support this rule. I have said that publicly, my firm said it in a comment letter, and I have said it to people in Washington and to Nasdaq directly.

But if the Commission is going to affirm the approval, and if Nasdaq genuinely believes it needs a $5 million floor to protect its market and its investors, then fine. Let them have it.

I mean that. Nasdaq has real concerns, and most of them are legitimate. Very low-priced, thinly traded securities can sometimes be manipulated. Extreme volatility in that part of the market is a problem. There are companies trading on a national securities exchange that probably should not be, and Nasdaq has every right to protect the integrity of its market and the value of its brand.

And there is no automatic right to be listed on Nasdaq. A listing is a privilege. Companies that fall below $5 million and cannot demonstrate they belong there should be delisted. I am not arguing otherwise, and I have never been.

So let them have the threshold. Let them have the 30-business day measurement period. Let them issue the Staff Delisting Determination.

That is the entire concession, and it is not a small one.

Let Me Have A Hearing

Here is the only thing I would ask for in return.

Let the company go to a hearing before it is delisted. I mean the ordinary hearing, the one that nearly every other Nasdaq deficiency already gets.

Everybody in this market knows how that process works, because it happens constantly. A company falls out of compliance. Nasdaq issues a notice. The company files an 8-K disclosing it. The company requests a hearing, pays the $20,000 fee and appears before an independent Hearings Panel. Independent panelists hear the company explain its business, its plan and its timeline, and they decide.

And through all of it, the company stays listed and keeps trading while the panel does its independent work.

That last part is not a technicality. It is the whole thing. Trading is what preserves the company’s ability to finance itself, to close a strategic transaction, to keep its shareholders whole while the question is decided.

Under the rule as approved, that protection does not apply. The company is suspended first. A hearing request does not stay the suspension. By the time anyone independent looks at the facts, the harm the company was trying to prevent has already happened.

What Nasdaq has proposed in the amended rule is, in practice, a hearing in name only, and everyone in this market knows it, including Nasdaq. The provision showed up in the second version of the proposal, after the public outcry related to this rule made itself heard, and it has the shape of a concession without the substance of one. A company that has already been suspended, whose stock has already stopped trading and whose financing options have already closed, is not helped by an opportunity to come back under an even greater standard, the one reserved for initial listings, that it could not satisfy before any of that happened. That is a higher bar than the one it failed, and one it could not have cleared before any of that happened. It reads as relief to the untrained eye. In practice, it does nothing for anyone, including the shareholders the rule is supposed to protect.

This Costs Nasdaq Nothing

The strongest thing about this practical compromise is that it asks Nasdaq to build nothing.

The hearing process already exists. The rules governing it already exist. The panelists are already vetted and already sitting. Nasdaq has run this process for years, across nearly every category of listing deficiency, and companies go through it routinely. The companies pay for it themselves.

Nobody is asking Nasdaq to invent a procedure, hire a department or absorb a cost. We are asking Nasdaq to apply the process it already runs to one more deficiency.

So what is the harm?

Let an independent panel look at the company. Is this a real operating business with employees, technology, potential, a clinical trial underway, a transaction pending? Or is it a manipulated shell company hanging on, looking for someone to sell itself to? Those two companies are not the same, and a panel is exactly the mechanism for telling them apart.

And if the panel looks at the facts and decides the company does not belong on Nasdaq, then the panel delists it. That is not a loophole. That is the system working the way it was designed to work under current Nasdaq Rules. Nasdaq still gets the outcome it wants in every case where the outcome is warranted. What it gives up is the ability to reach that outcome through an automatic cliff, without anyone independent having looked.

What Each Side Actually Gets

Nasdaq gets its $5 million standard, the accelerated timeline and the authority to move against companies it believes are harming its market. It gets the tool it has been asking for.

Companies get one independent review before something irreversible happens to them and to their shareholders. Not a right to stay listed. A right to be heard.

The Commission gets to approve a rule without having to decide that an automatic delisting with no meaningful process in it is what investor protection looks like. It also gets an outcome that fits the capital formation agenda Chairman Atkins and this administration have been advancing since his December 2025 remarks at the New York Stock Exchange, which is to make it easier for companies to go public and easier for the good ones to stay listed. Removing a company from a national securities exchange without a hearing is hard to reconcile with either objective. A hearing is not and should be granted.

Both sides are closer than the noise level of this debate suggests. The disagreement is not really about $5 million. Most of the opposition I hear, when you get past the first two minutes, is about the automatic cliff. Remove the cliff and keep the standard, and a large part of the industry objection goes with it.

The Part That Is On Us

This is the part that Robbins would call “Let Me.” The Commission’s written statement window on the underlying approval closed on October 6, and Nasdaq filed its own statement that day defending the approval.

There is also a filing most people missed. On October 5, the SEC published notice of an immediately effective Nasdaq rule change, SR-NASDAQ-2026-081, modifying the operative date of the $5 million requirement so that it takes effect upon termination of the stay. The practical consequence is worth knowing. The first business day counted toward the 30-day measurement period will be the day after the stay ends, and nothing from July or from the stay period counts against a company. Every company at risk starts with a clean slate.

And in the meantime, a stay is not a strategy. The rule has not gone away. It is waiting. Every company and board at risk should be using this period to build market capitalization, strengthen the balance sheet, evaluate strategic alternatives and talk to shareholders, because none of that depends on what the Commission decides.

One Room

I keep coming back to the same thought. I find it hard to believe that Nasdaq, the Commission and the small public company community could not sit in one room and work this out.

Nasdaq protects its market. Companies get a hearing. An independent panel sorts the legitimate businesses from the ones that are not. And the Commission approves a rule it can defend, without having to hold that removing a company with no process at all is consistent with the Exchange Act.

Let them have the rule. Let the founders, employees and shareholders who built and believe in these companies have a hearing.