COVID-19 Market Volatility: Nasdaq Provides Temporary Relief from Certain Listing Requirements

April 20, 2020

The Nasdaq Stock Market has temporarily suspended the continued listing bid price and market value of publicly held shares listing requirements for its issuers through June 30, 2020. This relief, effective immediately, provides issuers with additional time to regain compliance with the bid price and/or market value of publicly held share requirements.

Nasdaq’s temporary relief, issued April 16, comes in response to the coronavirus (COVID-19) pandemic and related extraordinary market conditions.[1] The relief is designed to reduce investor uncertainty by allowing additional time for Nasdaq-listed issuers to regain compliance with the bid price and/or market value of publicly held share requirements (Price-Based Requirements).

According to Nasdaq, tolling of the compliance period is expected to help companies focus on running their businesses during the pandemic, rather than on meeting Nasdaq’s Price-Based Requirements. As a result, the tolling is also expected to help alleviate investor fears that Nasdaq-listed issuers experiencing significant stock volatility run the risk of delisting for noncompliance with Nasdaq’s Price-Based Requirements.

While the temporary relief is effective immediately, the US Securities and Exchange Commission still published a notice on April 17 to solicit comments on the rule change for interested persons.

What Are the Nasdaq Price-Based Requirements for Continued Listing?

Disregarding the temporary relief, issuers with Nasdaq-listed securities are required to maintain a minimum closing bid price of $1.00 per share and a market value of publicly held shares of between $1 million and $5 million, depending on the type of security listed and the specific market on which the security is listed. Once an issuer becomes noncompliant with either of these Price-Based Requirements, it has 180 days to regain compliance.[2]

Nasdaq Listing Rule



Minimum Price

Minimum Market Value of Publicly Held Shares

5450(a) and (b)

Global Market (including Global Select Market)

Primary Equity Securities

$1 per share

$5 million

5460(a)(2) and (3)

Global Market (including Global Select Market)

Preferred Stock and Secondary Classes of Common Stock

$1 per share

$1 million

5550(a)(1) and (5)

Capital Market

Primary Equity Securities

$1 per share

$1 million

5555(a)(1) and (4)

Capital Market

Preferred Stock and Secondary Classes of Common Stock

$1 per share

$1 million

How Is Nasdaq Providing Relief for Price-Based Requirements?

Nasdaq has paused the 180-day compliance period for Listing Rules 5810(c)(3)(A) (bid price) and 5810(c)(3)(D) (market value) effective immediately. All compliance periods for Price-Based Requirements will be tolled through, and including, June 30, 2020, which means the following:

  • For issuers that become noncompliant with the Price-Based Requirements between now and June 30, the 180-day compliance period will not start until July 1, 2020. All issuers newly identified as noncompliant will have until December 28, 2020 to regain compliance (180 days from July 1, 2020). Nasdaq will continue to monitor for and notify issuers about instances of noncompliance with the Price-Based Requirements.
  • For issuers that are currently in an existing 180-day compliance period, the compliance period will be paused through June 30, 2020, and will start again on July 1, 2020. Issuers will then receive the balance of days remaining in their compliance period. For example, if an issuer is currently 100 days into its 180-day compliance period for a bid price deficiency, then starting on July 1, 2020, the issuer will still have the remaining 80 days to regain compliance.

We note that Nasdaq has been contacting issuers that were already noncompliant with the Price-Based Requirements on April 16 to notify them that the compliance period has been tolled.

Nasdaq will continue to monitor noncompliance with the Price-Based Requirements and will continue to send notices of noncompliance to issuers. Additionally, Nasdaq will continue to keep its noncompliance website up to date, reflecting the names of all noncompliant companies.

Form 8-K Considerations

Issuers that are currently noncompliant with the Price-Based Requirements and have already filed a current report on Form 8-K reporting the receipt of a notice of noncompliance from Nasdaq under Item 3.01 might consider voluntarily updating their previous Item 3.01 disclosures.[3] Issuers can do so by either amending the prior Form 8-K or filing a new Item 3.01 Form 8-K.

In addition, issuers may wish to update any previously issued press releases accordingly. Meanwhile, issuers that receive a notice of noncompliance from Nasdaq must still report the notice under Item 3.01 of Form 8-K within four business days of receipt.[4]

Coronavirus COVID-19 Task Force

For our clients, we have formed a multidisciplinary Coronavirus COVID-19 Task Force to help guide you through the broad scope of legal issues brought on by this public health challenge. We also have launched a resource page to help keep you on top of developments as they unfold. If you would like to receive a daily digest of all new updates to the page, please subscribe now to receive our COVID-19 alerts.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Laurie Cerveny
Michael Conza
Bryan Keighery
Carl Valenstein
Julio Vega

Torsten Schwarze

Hong Kong
June Chan
Eli Gao
Louise Liu
Edwin Luk
Billy Wong

Timothy J. Corbett
Iain Wright
Carter Brod

New York
Thomas P. Giblin, Jr.
Howard A. Kenny
Christina Melendi
Kimberly M. Reisler

Palo Alto
Albert Lung

Justin W. Chairman
James W. McKenzie
Joanne R. Soslow

Celia Soehner

David C. Schwartz

Bernard Lui
Joo Khin Ng

Washington, DC
David A. Sirignano

[1] In its proposed rule change, Nasdaq noted “an increase in the number of companies whose securities are becoming non-compliant with the Price-based Requirements amidst the current market uncertainty,” and that the “decline in general investor confidence has resulted in depressed pricing for companies that otherwise remain suitable for continued listing.”

[2] See Nasdaq Listing Rules 5810(c)(3)(A) (for bid price) and 5810(c)(3)(D) (for market value).

[3] Per Instruction 3 to Item 3.01 of Form 8-K, notices or other communications subsequent to an initial notice to indicate that the registrant does not comply with a standard for continued listing that was the subject of the initial notice are not required to be filed, but may be filed voluntarily.

[4] Per Instruction 2 to Item 3.01 of Form 8-K, disclosure is still required even if the registrant has the benefit of a grace period or similar extension period during which it may cure the deficiency that triggers the disclosure requirement.