On July 29, 2026, the U.S. Securities and Exchange Commission (SEC) stayed its July 22 approval order for Nasdaq’s proposed US$5 million Market Value of Listed Securities (MVLS) continued listing requirement.
The stay followed notices of intent to petition for Commission review, including notices involving Cemtrex, Inc., a Nasdaq-listed company, and the Small Public Company Coalition, an organization representing the interests of smaller public companies. Following these notices, the SEC stayed the staff-approved order under Rule 431(e) of its Rules of Practice. As a result, the proposed requirement is not currently operative, and its ultimate status will depend on the outcome of the Commission’s review.
The Regulatory Status Has Changed
On July 22, 2026, the SEC, acting through delegated authority, approved Nasdaq’s proposal to introduce a new US$5 million MVLS continued listing requirement.
One week later, on July 29, the SEC stayed that approval order under Rule 431(e) of its Rules of Practice after receiving notices of intent to petition for Commission review. The stay will remain in effect until the Commission orders otherwise.
The distinction is important. The SEC has not rejected or withdrawn the rule. Rather, the effectiveness of the approval order has been suspended while the full Commission reviews the matter.
Accordingly, the US$5 million MVLS requirement should not currently be described or treated as an operative Nasdaq continued listing standard.
What the Proposed Rule Would Have Changed
The proposed rule would establish a minimum US$5 million MVLS requirement as an additional continued listing standard for Nasdaq-listed companies.
If a company’s MVLS remained below US$5 million for 30 consecutive business days, Nasdaq staff would issue a delisting determination and suspend trading in the company’s securities. Unlike many existing continued listing deficiencies, the company would not receive a standard compliance period to regain the required market value before facing suspension and delisting proceedings.
This would represent a significant change for smaller listed companies. A sustained decline below the threshold could therefore lead to much faster regulatory consequences, leaving issuers with less time to address the deficiency.
Why Did the SEC Stay the Approval Order?
The stay followed notices of intent to petition for Commission review, including those involving Cemtrex, Inc. and the Small Public Company Coalition.
This did not, by itself, mean that the rule was rejected. Instead, it triggered a further stage of the SEC’s review process. Under Rule 431(e) of the SEC’s Rules of Practice, the Commission may stay an action taken under delegated authority while that action is under Commission review.
The stay therefore represents a procedural change in the rule’s status, rather than a final determination on the merits of Nasdaq’s proposal.
The Commission must now consider whether the staff-approved order should stand. Until that process is completed, the ultimate outcome of the proposed rule remains unresolved.
What Listed Companies Should Do Now
The immediate implication is that Nasdaq-listed companies should not treat the US$5 million MVLS threshold as a currently effective continued listing requirement.
Companies and advisers that updated compliance materials, regulatory analyses or external communications following the July 22 approval should review those materials to ensure they accurately reflect the July 29 stay.
At the same time, the proposal should not be disregarded. Companies with relatively low market values should continue monitoring their MVLS and the Commission’s review, particularly because the final decision could materially affect their continued listing risk.
Until the SEC determines the rule’s final status, compliance planning should remain based on Nasdaq’s currently applicable continued listing requirements, rather than assuming that the proposed US$5 million threshold is already in force.
Why the Stay Matters Beyond This Rule
This development highlights an important distinction in U.S. securities regulation: regulatory approval does not always mean that a rule has reached its final procedural status.
An exchange rule may receive SEC approval but subsequently become subject to Commission review, a stay or other procedural developments that affect whether and when the rule becomes operative.
For companies already listed on Nasdaq, as well as those preparing for a U.S. listing, monitoring the status and implementation of regulatory changes is therefore as important as understanding the substance of the rules themselves. A change in regulatory status can directly affect compliance assessments, disclosure decisions and advice provided to management.
Hexcellence Consulting supports companies throughout the U.S. listing process and ongoing compliance, helping management monitor regulatory developments and assess how changing requirements may affect their listing and compliance strategies.
For further guidance on Nasdaq listing requirements and ongoing U.S. regulatory compliance, contact us.
