Nasdaq $5 Million Continued Listing Rule Remains Stayed as SEC Grants Review

The Securities and Exchange Commission has granted petitions seeking full Commission review of the prior approval of Nasdaq’s proposed $5 million Market Value of Listed Securities (“MVLS”) continued listing requirement.

Importantly, the rule remains stayed during the Commission’s review and is not currently in effect.

The development means the full Commission will now consider the proposed rule and the issues raised by market participants regarding its potential impact on smaller public companies and the broader emerging growth markets.

What Happens Next?

The Commission’s review could take several months. As part of the process, interested parties will have another opportunity to submit statements supporting or opposing the proposed rule.

As originally proposed, Nasdaq’s rule would establish a minimum MVLS of $5 million for continued listing. A company that remained below the threshold for 30 consecutive business days could receive a Staff Delisting Determination without the traditional compliance period available for many other Nasdaq listing deficiencies.

The proposal has generated significant industry debate, including questions regarding its potential impact on micro-cap and other emerging growth companies.

The Commission’s decision to undertake full review does not determine the ultimate outcome of the rule. For now, however, the key takeaway for Nasdaq-listed companies is straightforward:

The $5 million MVLS continued listing requirement remains stayed and is not currently in effect.

Lucosky Brookman will continue to monitor the Commission’s review and its potential implications for Nasdaq-listed companies and the emerging growth markets.