Overview
On October 5, 2026, the Securities and Exchange Commission’s (the “SEC” or “Commission”) Division of Trading and Markets (acting for the Commission pursuant to delegated authority) issued a Notice of Filing and Immediate Effectiveness of Nasdaq’s proposed rule change, filed on September 25, 2026 (the “Timing Rule”), which addresses when Nasdaq would begin counting business days toward non-compliance for purposes of Nasdaq’s stayed $5 million Market Value of Listed Securities (“MVLS”) continued listing requirement (the “MVLS Rule”).
The October 5 notice is not a new SEC approval order for the MVLS Rule itself. The MVLS Rule had been approved by the SEC’s Division of Trading and Markets under delegated authority on July 22, 2026, and became operative upon approval before being stayed. That approval order remains stayed. On July 29, 2026, the Commission notified Nasdaq that it had received notices of intention to petition for review, which triggered an automatic stay under Rule 431(e) of the Commission’s Rules of Practice, and on September 11, 2026, the Commission issued an order granting the petitions for review and continuing the stay pending further order.
Key Takeaways
Counting business days under the MVLS Rule would start after the stay ends. Under the Timing Rule, once the stay terminates, Nasdaq would begin considering a listed company’s MVLS for purposes of Nasdaq Rules 5450(a)(3) and 5550(a)(6) on the business day immediately following termination of the stay. The Timing Rule would exclude both the period between the July 22 approval order and the July 29 automatic stay and the period during which the stay remains in effect. A company whose MVLS then remains below $5 million for 30 consecutive business days would receive a Staff Delisting Determination, which it may appeal to a Nasdaq Hearings Panel.
The measurement period runs for 30 consecutive business days. Nasdaq’s filing illustrates the Timing Rule as follows: if the stay had terminated on September 24, 2026, then September 25, 2026, would have been the first business day counted, and a company would first become non-compliant only if its MVLS remained below $5 million for 30 consecutive business days thereafter.
The October 5 notice states that the Timing Rule became effective, but the Timing Rule should still be monitored. Nasdaq filed the Timing Rule under Section 19(b)(3)(A)(iii) of the Securities Exchange Act of 1934 and Rule 19b-4(f)(6), under which properly designated self-regulatory organization rule changes may take effect upon filing. Rule 19b-4(f)(6) changes normally are not operative for 30 days, and Nasdaq requested a waiver of that operative delay under Rule 19b-4(f)(6)(iii). However, the October 5 notice does not explicitly state that the requested waiver was granted.[1] The Commission retains the discretion to temporarily suspend the Timing Rule within 60 days of filing and institute proceedings to determine whether it should be approved or disapproved, and the October 5 notice solicits comments on the Timing Rule, with submissions due on or before the date that falls 21 days after publication in the Federal Register.
The ultimate outcome regarding the MVLS Rule remains uncertain. The Timing Rule presupposes that the stayed MVLS Rule ultimately takes effect, and Nasdaq has stated that it would not apply its proposed rule changes if the Commission ultimately disapproved. If the Commission disapproves or modifies the July 22 approval order, the premise for the Timing Rule could change. Written statements in support of or in opposition to the July 22 approval order were due by October 6, 2026, and the Commission has not prescribed a deadline for its final decision. Nasdaq-listed companies with MVLS near $5 million should continue to monitor their MVLS and related SEC and Nasdaq developments.
The SEC’s October 5 notice is available here.
If you have any questions regarding this client alert, please call or e-mail your SRFC attorney.
Related Practice Areas:
- Corporate and Securities Department
- Capital Markets and Securities
- Public Company Reporting and Compliance
DISCLAIMER: This communication, which we believe may be of interest to our clients and friends of the firm, is for general information only. It is not a full analysis of the matters presented and should not be relied upon as legal advice. This may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.
[1]Note that the Division of Trading and Markets has delegated authority to reduce the Rule 19b-4(f)(6)(iii) operative-delay period pursuant to 17 CFR 200.30-3(a)(59). In recent years, when the Division has granted previous waivers of the operative-delay period, practice has varied regarding whether a citation to 17 CFR 200.30-3(a)(59) was expressly included in the related release. However, even in cases where an express citation to such rule was not included in the release, the Division has generally included explicit language in the release granting the waiver (see SEC Releases 34-106556; 34-106139; 34-102281; 34-99734; 34-96248; and 34-96341). The October 5 notice regarding the Timing Rule does not include any citation to 17 CFR 200.30-3(a)(59) (it only includes a reference to 17 CFR 200.30-3(a)(12)), but more notably, it also does not include an explicit grant of the operative-delay period waiver.