SEC Approves New $0.25 Minimum Trading Price Requirement for NYSE and NYSE American Companies

The Securities and Exchange Commission has approved new continued listing standards for the New York Stock Exchange and NYSE American establishing a $0.25 minimum trading price requirement, effective July 1, 2027.

Under the new rules, if a listed security closes below $0.25 per share on any trading day, the applicable exchange will immediately suspend trading and commence delisting proceedings. Unlike many other continued listing deficiencies, companies will not receive a cure period or an opportunity to submit a compliance plan before suspension.

The change creates an important new consideration for microcap, smallcap and emerging growth public companies trading at lower share prices.

A New Immediate Delisting Trigger

The new requirement is separate from the exchanges’ existing minimum-price standards.

NYSE, for example, generally considers a company below compliance when its average closing price falls below $1.00 over a consecutive 30-trading-day period and provides an opportunity to regain compliance.

The new $0.25 threshold works differently. A single trading day closing below $0.25 can trigger suspension and delisting proceedings.

The SEC approved the rules after NYSE and NYSE American raised concerns about volatility, potential manipulation and market integrity associated with extremely low-priced securities. The July 1, 2027 effective date is intended to give listed companies time to prepare for the new standard.

Part of a Broader Shift in Continued Listing Standards

The rule is the latest indication of heightened exchange and regulatory scrutiny of companies operating near the lower boundaries of continued listing requirements.

Earlier this year, the SEC’s Division of Trading and Markets approved Nasdaq’s proposed $5 million Market Value of Listed Securities continued listing requirement. That approval was subsequently stayed pending Commission review.

Together, these developments underscore the importance for smaller public companies of evaluating exchange compliance proactively rather than waiting until a deficiency occurs.

What Companies Should Consider

NYSE and NYSE American issuers whose securities trade at lower prices should begin assessing the potential impact of the new requirement well before July 1, 2027.

Companies should consider:

• Monitoring closing prices alongside other applicable continued listing requirements;
• Evaluating their proximity to the $0.25 threshold and potential exposure to market volatility;
• Assessing the timing and approvals that may be required for a reverse stock split;
• Considering financing or strategic alternatives where appropriate; and
• Developing contingency plans for a potential trading suspension or delisting.

The lack of a cure period makes advance planning particularly important. Once the new requirement becomes effective, companies approaching the $0.25 threshold may have limited time to implement measures designed to preserve their exchange listing.

Lucosky Brookman LLP regularly advises public companies regarding exchange listing and continued listing requirements, capital markets transactions and related corporate and securities matters.