TheCorporateCounsel.net

Last month, Dave blogged about implications of the SEC’s decision to grant a full review of Nasdaq’s previously-approved – but now stayed – $5 million continued listing requirement. Now, the SEC has posted notice of filing and immediate effectiveness of a proposed rule change that will modify the operative date of the standard in light of the stay. Here’s an excerpt:

Pursuant to the approved rule change, a company becomes non-compliant with the new $5 million continued listing requirement when it fails to maintain that minimum threshold for thirty consecutive business days. The Stay creates uncertainty around the application of the rule given that certain companies were below the threshold for the period between the rule’s approval and the implementation of the Automatic Stay. To eliminate any such uncertainty or confusion, Nasdaq is filing this proposed rule change to modify the operative date of SR-Nasdaq-2026-004.

As revised, the rule will become operative upon termination of the Stay and the first business day that Nasdaq will consider towards determining whether a company is noncompliant with Rules 5450(a)(3) and 5550(a)(6) (i.e., in determining whether the company’s Market Value of Listed Securities has been below $5 million for 30 consecutive business days) will be the business day immediately following the termination of the Stay. For example, if, hypothetically, the Stay is terminated on September 24, 2026, the first business day considered in determining whether a company is non-compliant with the $5 million Market Value of Listed Securities continued listing requirement would be September 25, 2026, and the company would first become non-compliant with the requirement if it remains below the threshold for thirty consecutive business days thereafter.

For clarity, no consideration would be given to the company’s market capitalization for the period between the rule’s approval on July 22, 2026, and the implementation of the Automatic Stay on July 29, 2026, nor during the operation of the Stay. Of course, if the proposed rule change is ultimately disapproved by the Commission, then Nasdaq would not apply it.

– Liz Dunshee