On July 22, 2026, the Securities and Exchange Commission approved a rule that would remove any company whose market value stays below $5 million for 30 straight business days, a move that typically sends its shares to the over-the-counter market. Seven days later the approval was frozen, and it has stayed frozen while the full Commission decides whether the rule should stand. For the CEO of a company trading at near the $5m market cap, that sequence raises two practical questions: is this a rule to plan around or one to wait out, and who, outside Nasdaq and the SEC, has any say in how it ends?
Gregg Jaclin, Managing Director at Exchange Listing LLC, started his advisory work moving companies the other way, helping businesses stuck on the OTC markets qualify for Nasdaq and NYSE, and he still works with the kind of small public companies a floor like this one would reach first.
The SEC’s Division of Trading and Markets approved the rule on July 22, 2026. What the Nasdaq $5 Million MVLS Rule Requires,
The standard covers all three Nasdaq tiers. A company must keep a market value of listed securities, or MVLS, of at least $5 million, and one that falls short for 30 consecutive business days faces immediate suspension and delisting, according to the SEC’s approval order.
Unlike most of Nasdaq’s continued listing standards, it has no cure period. A company that misses the $1.00 minimum bid price gets 180 days and often a second 180. An appeal to a Nasdaq Hearings Panel does not pause the suspension. And regaining $5 million is not enough to come back: under Amendment No. 1, the Panel can grant up to 180 days for a company to show that it meets all of the requirements for an initial listing.
How the SEC Review of the Nasdaq Rule Works
Exchange listing standards are written by the exchanges and approved by the SEC. An exchange files a proposed rule change, the SEC publishes it for public comment, and staff acting under authority delegated by the Commission often make the final call. Nasdaq’s rule went through that process in the first half of 2026 before the Division approved it in July.
A staff decision can be appealed to the Commission itself. Under Rule 431 of the SEC’s Rules of Practice, a petition for review automatically stays the staff’s action.
Five parties told the SEC this summer that they intended to petition. Two, the Small Public Company Coalition and Cemtrex, Inc., filed formal petitions on August 5. On September 11 the Commission granted both and ordered that the approval “shall remain stayed pending further order of the Commission,” according to the order published in the Federal Register. Statements for or against the approval were due October 6.
Jaclin, in written remarks on the review, said the order “functions somewhat like a cert petition at the Supreme Court,” placing the matter “in front of the Commission for a full merits review.” He called the grant a “procedural victory, but not yet a lasting win.” Law firm Mayer Brown described the earlier stay as “procedural and temporary, not a substantive ruling against the rule,” and the same reading applies now. The Commission can affirm the approval, modify it or set it aside. Until it acts, Nasdaq cannot enforce the standard.
Who Gets a Say in a Nasdaq Listing Rule
Rule 431 keeps that door open beyond the petitioners. Once review is granted, “any party or other person may file a statement in support of or in opposition to” the staff’s action. A company does not need to be a petitioner or a member of a trade group to put its experience before the Commission. In Jaclin’s words, the rule “allows any interested party” to weigh in, “not just SPCC or the other parties that filed petitions for review.”
Five parties signaled an intent to petition, set against the 91 issuers Nasdaq counted below the $5 million line in 2025 alone. The record those participants built is specific. The coalition’s filings rest on a historical analysis by Craig M. Lewis, a former SEC chief economist. Cemtrex’s petition, signed by chief executive Saagar Govil, describes a company with about $75 million in recent annual revenue and roughly 300 U.S. employees whose market value had moved above and below $5 million over the prior year. The approval order itself summarizes commenter concerns at length, from the risk that a fixed trigger could encourage short selling in small stocks to the argument that removing the automatic stay during an appeal leaves appeal rights “largely illusory.”
Gregg Jaclin on Planning While the Rule Is on Hold
Jaclin spends most of his working time between growth companies and the institutions that approve their listings.
“I need to bring in the bankers. I need to have a good relationship with the exchanges. I need to help bring in the attorneys and the auditors and everyone else,” Jaclin said.
Asked earlier this year what problem the industry still hasn’t solved, he pointed to the shifting listing requirements: “Once the market knows exactly what the rules are, it will adjust and we’ll work from there. Right now there’s still a slowdown. A lot of companies are in holding patterns with NASDAQ and NYSE.”
A holding pattern suits the Commission’s review. It suits a board less well, because a company that treats the stay as the end of the story will have no plan if the rule takes effect, and the rule gives only 30 business days of warning.
Track the number the rule uses. Most small-cap boards watch the share price because the $1.00 bid requirement is the listing risk they know. A company can trade well above $1.00 a share and still sit near $5 million in total market value.
Model a drawdown. A company valued at $9 million is a 45% decline from the threshold. Running that scenario against the company’s own trading history shows whether the rule is a remote concern or a live one.
Know the way back. Recovery above $5 million does not end the problem under the rule as approved, so a board should know how far its balance sheet and public float sit from initial listing standards today.
Keep other routes to capital open. “Whether it’s an M&A deal, a private raise, crowdfunding, or going public, we look at whatever’s best for them,” Jaclin said of his clients.
What Comes Next for Nasdaq’s Rule and NYSE American’s
The Commission now holds the petitions, the statements filed by October 6 and the record built over the past eight months. A parallel proposal from NYSE American for its own $5 million market capitalization test is also pending, and the Commission has extended its deadline to act on it to November 15, 2026.
The Nasdaq rule cannot be enforced today, and it has not been withdrawn. A company that uses the intervening months to learn exactly where it stands against a $5 million line will be ready for either outcome. It will also be in a position to describe, with real numbers, how the next listing rule would affect it while that rule is still open for comment.