Nasdaq Listing Requirements: Capital Market Thresholds

Nasdaq’s listing requirements are a set of numeric tests in the Nasdaq Listing Rules 5000 series that a company must meet to list its shares and to stay listed. For micro-caps the relevant tier is usually the Nasdaq Capital Market, covered by Rule 5505 (initial listing) and Rule 5550 (continued listing). The Nasdaq Global Market and Global Select Market have higher standards in the 5300 and 5400 series, which this article does not cover.

This matters to retail investors because a shortfall against these thresholds is what produces a deficiency notice, a reverse split or a delisting. Figures below are quoted from the rulebook text as displayed by Nasdaq in mid-2026, updated for the SEC rule filings noted below through October 2026.

Initial listing: Rule 5505

A company applying to list its primary equity security on the Capital Market must meet all of Rule 5505(a) and at least one of the three standards in Rule 5505(b).

Rule 5505(a), all companies:

• Price: minimum bid price of $4 per share. The rule has also allowed a minimum closing price of $3 per share (Equity or Net Income Standards) or $2 per share (Market Value of Listed Securities Standard), with net tangible assets above $2 million (three years of operation), above $5 million (less than three years), or average revenue of at least $6 million for the last three years, held for at least five consecutive business days before approval. Nasdaq filed SR-NASDAQ-2026-082 on September 30, 2026 to delete that alternative and require $4 in all cases, effective on filing and, per Nasdaq, operative 30 days after the filing date.
• At least 1,000,000 Unrestricted Publicly Held Shares.
• At least 300 Round Lot Holders, at least 50% of whom each hold unrestricted securities with a market value of at least $2,500.
• At least three registered and active Market Makers.
• If the security already trades over the counter: a 30-trading-day average daily volume of at least 2,000 shares, with trading on more than half of those days, unless it lists with a firm commitment underwritten offering of at least $5 million.
• For ADRs, at least 400,000 issued.

Rule 5505(b), at least one of:

Standard	Requirements
Equity (b)(1)	Stockholders’ equity of at least $5 million; Market Value of Unrestricted Publicly Held Shares (MVUPHS) of at least $15 million; two-year operating history
Market Value of Listed Securities (b)(2)	MVLS of at least $50 million; stockholders’ equity of at least $4 million; MVUPHS of at least $15 million
Net Income (b)(3)	Net income from continuing operations of $750,000 in the latest fiscal year or two of the last three; stockholders’ equity of at least $4 million; MVUPHS of at least $15 million

For an IPO, the MVUPHS amounts must come from the offering proceeds, so shares registered for resale do not count. Companies already trading must meet the MVLS and price tests for 90 consecutive trading days before applying if they qualify only under (b)(2).

Companies whose business plan is to complete acquisitions (SPACs) cannot use (b)(2) and must use (b)(4): MVLS of $75 million, MVUPHS of at least $20 million and at least four Market Makers. See SPAC explained.

Recent changes to Rule 5505, from the rulebook’s amendment history and the SEC releases:

• SR-NASDAQ-2024-084 (approved March 12, 2025, operative April 11, 2025): for IPOs, MVUPHS must be met from offering proceeds.
• SR-NASDAQ-2025-068 (approved December 18, 2025, SEC Release No. 34-104450): raised the Net Income Standard MVUPHS minimum from $5 million to $15 million.
• SR-NASDAQ-2025-066 (December 2025): amended initial listing requirements for de-SPAC transactions.
• SR-NASDAQ-2026-033 (April 2026, operative May 15, 2026): created Rule 5505(b)(4) and the 400-holder test for acquisition companies.
• SR-NASDAQ-2026-082 (filed September 30, 2026): removes the $3/$2 alternative price test, as above.

Separately, Rule 5210(l), adopted in SR-NASDAQ-2025-069 (approved May 14, 2026, operative June 14, 2026), sets extra tests for companies headquartered, incorporated or principally administered in China, Hong Kong or Macau: a firm commitment IPO raising at least $25 million in gross proceeds, at least $25 million MVUPHS after a business combination, and, for a company moving from the OTC market or another exchange, at least $25 million MVUPHS and one year of trading. Rule 5210(k) applies a lesser-of $25 million or 25% test to companies principally administered in other “Restrictive Market” jurisdictions. Rule 5505 is the first place to check, because the text above can change.

Continued listing: Rule 5550

Rule 5550(a), all must be met:

1. At least two registered and active Market Makers.
2. Minimum bid price of at least $1 per share.
3. At least 300 Public Holders.
4. At least 500,000 Publicly Held Shares.
5. Market Value of Publicly Held Shares of at least $1 million.
6. Market Value of Listed Securities of at least $5 million (see the stay note below).

Rule 5550(b), at least one of:

• Equity Standard: stockholders’ equity of at least $2.5 million.
• Market Value of Listed Securities Standard: MVLS of at least $35 million.
• Net Income Standard: net income from continuing operations of $500,000 in the latest fiscal year or two of the three most recent.

The holder tests are the ones that can drift without anyone noticing, which is why some companies track their shareholder base with investor relations software between proxy seasons.

The cure periods that go with them

Rule 5810(c)(3)(A) sets the bid price clock. The deficiency exists when the bid is below $1 for 30 consecutive business days. The company then has 180 calendar days to regain compliance, which requires a minimum of 10 consecutive business days at or above $1 (Staff can extend to generally no more than 20 under 5810(c)(3)(H)). A Capital Market company can receive a second 180-day period if it meets the market value of publicly held shares requirement and all other initial listing standards except bid price on day 180, and notifies Nasdaq it intends to cure. Equity, net income and holder-count shortfalls instead go through a compliance-plan review (Rule 5810(c)(2)). The full process is in Nasdaq delisting process.

Recent rule changes and the stay

Two changes since early 2025 are worth knowing, with dates:

• $0.10 rule. Rule 5810(c)(3)(A)(iii): a closing bid price of $0.10 or less for ten consecutive business days triggers a Staff Delisting Determination with no compliance period. A hearing request does not stay trading suspension for this deficiency (Rule 5815(a)(1)(B)(ii)e). The rulebook history shows this amendment operative January 19, 2026.
• $5 million MVLS rule (SR-NASDAQ-2026-004). The rule adds a $5 million MVLS floor in Rule 5550(a)(6) (and Rule 5450(a)(3) for the Global Market). A shortfall for 30 consecutive business days would produce an immediate Staff Delisting Determination with no compliance period, and a hearing request would not stay suspension. The SEC’s Division of Trading and Markets approved it under delegated authority on July 22, 2026 (Release No. 34-105971). On July 29, 2026 the approval was automatically stayed under Rule of Practice 431(e) after notices of intention to petition for review were filed, and on September 11, 2026 the Commission granted review and continued the stay (Release No. 34-106338). In SR-NASDAQ-2026-081 (notice published October 5, 2026), Nasdaq said the rule would become operative only when the stay ends, with the 30-day count starting the next business day. Treat the $5 million test as not operative while the stay lasts.

What to check in the filings

• Form 8-K Item 3.01 (notice of delisting or failure to satisfy a continued listing rule): states the date of the notice and the rule failed.
• 10-K and 10-Q risk factors and “Liquidity” or “Listing” sections: management’s own statement of which Rule 5550 tests are tight.
• Balance sheet: stockholders’ equity against the $2.5 million test.
• Cover page: shares outstanding and the aggregate market value held by non-affiliates (a rough input for the publicly held share tests, not identical to Nasdaq’s measure).
• DEF 14A: proposals for a reverse split or share authorization increase, often tied to bid price or equity cures.
• Press releases: Nasdaq requires a public announcement of a deficiency notice within four business days.

Red flags vs normal

Normal: a notice of a single deficiency with a stated cure date; a company that discloses its plan in an 8-K. Worth reading closely: more than one deficiency at once, a company that passes only one of the three Rule 5550(b) standards by a thin margin, or a fix that creates a second problem. Rule 5810(c)(3)(A) says a company is not considered to have regained bid price compliance if the action it takes (such as a split) pushes it below another listing threshold.