Nasdaq has adopted a rule change eliminating the $2 and $3 reduced-price alternatives currently available to certain companies seeking an initial listing on the Nasdaq Capital Market. Once the rule change becomes operative, companies seeking an initial Nasdaq Capital Market listing will be required to meet a minimum stock price of $4.00.

The change follows NYSE American’s move earlier this year to eliminate initial listings below $4, and further raises the threshold for companies seeking access to the U.S. public markets. Companies currently pursuing or considering a Nasdaq listing — including Canadian and other foreign issuers — should evaluate how the new requirement may affect their listing strategy, transaction structure, and timing.

Nasdaq filed the rule change with the U.S. Securities and Exchange Commission (SEC) on September 30, 2026. The SEC published its notice of the Nasdaq Listing Rule 5505 amendment on October 7, 2026.

What Is Nasdaq’s New $4 Minimum Initial Listing Price Requirement?

Nasdaq Listing Rule 5505 currently provides qualifying companies with more than one way to satisfy the minimum price requirement for an initial listing on the Nasdaq Capital Market.

Under the standard requirement, a company must have a minimum bid price or closing price of at least $4.00 per share. Under Nasdaq’s Alternative Price Requirements, qualifying companies may currently list at:

• $3.00 per share if they satisfy the Equity or Net Income Standard and certain additional financial requirements; or

• $2.00 per share if they satisfy the Market Value of Listed Securities Standard and certain additional financial requirements.

Nasdaq is eliminating the Alternative Price Requirements. As a result, companies seeking an initial listing on the Nasdaq Capital Market will need to have a minimum stock price of $4.00, regardless of which applicable initial listing standard they use.

Importantly, the amendment applies only to new listings and does not change continued-listing requirements for companies already trading on Nasdaq.

Why Is Nasdaq Eliminating the $2 and $3 Initial Listing Alternatives?

Nasdaq’s decision follows a similar change by NYSE American, which earlier this year eliminated its ability to initially list securities below $4. Nasdaq originally adopted its Alternative Price Requirements in part to compete with NYSE American, which at the time also permitted qualifying companies to list securities below $4.

With NYSE American having eliminated that option, Nasdaq stated that requiring a $4 minimum will align the Nasdaq Capital Market’s initial listing price requirement with those of other national securities exchanges.

Nasdaq also cited investor protection concerns. According to its filing, eliminating the ability to initially list securities below $4 may decrease the likelihood that a company will trade at low price levels and therefore reduce susceptibility to manipulation.

When Does Nasdaq’s New $4 Initial Listing Requirement Take Effect?

Nasdaq filed the rule change with the SEC on September 30, 2026. The rule became effective upon filing but is subject to a delayed operative date.

In its filing, Nasdaq stated that it intends to make the amendment operative 30 days after the filing date. Nasdaq explained that this transition period is intended to allow companies that have already taken substantial steps to list under the existing rules to complete the process.

We were recently informed by Nasdaq that the change becomes operative Sunday, October 25, 2026, with Friday, October 23, 2026, as the last day to list as a reduced-price qualifier.

Companies currently pursuing an initial Nasdaq Capital Market listing under the $2 or $3 alternatives should therefore assess their anticipated listing timeline promptly and determine whether they may be affected by the transition to the new standard.

How Will the Nasdaq $4 Minimum Affect IPOs and Uplistings?

The elimination of Nasdaq’s Alternative Price Requirements may be particularly relevant for smaller companies and companies pursuing an uplisting to the Nasdaq Capital Market that had anticipated relying on the $2 or $3 initial listing alternatives.

Companies considering an initial Nasdaq listing should assess whether the new $4 minimum could affect their:

• proposed offering or listing price;
• capitalization and share structure;
• anticipated transaction and listing timeline; and
• ability to satisfy Nasdaq’s applicable initial listing standards.

Issuers already in the process of pursuing a listing should also consider whether they can complete the process under the existing standards during the transition period or will instead need to satisfy the new $4 requirement.

What Does Nasdaq’s $4 Listing Requirement Mean for Canadian and Other Foreign Issuers?

Canadian and other foreign issuers considering access to the U.S. public markets should account for the new $4 requirement early in the listing process.

Companies that previously expected to qualify for the Nasdaq Capital Market under one of the reduced-price alternatives may need to reassess their proposed listing structure and coordinate with U.S. and home-country legal counsel, investment banks, financial advisers, and other participants regarding available options.

For Canadian companies in particular, the change may be relevant when evaluating a Nasdaq listing or uplisting as part of a broader cross-border capital markets strategy.

Foreign issuers may want to consider the listing of ADRs (American Depositary Receipts) as an alternative to the listing of their common shares in order to more easily satisfy the new $4 minimum price.

What Should Companies Considering a Nasdaq Listing Do Now?

Companies pursuing or contemplating an initial Nasdaq Capital Market listing should review their proposed listing price, structure, and timeline against the new requirement, particularly if they anticipated relying on the existing $2 or $3 alternatives.

Issuers currently in the listing process should also determine whether they may complete their listing under the existing standards during the transition period or will need to satisfy the new $4 requirement.

For questions about the new Nasdaq listing requirement or how it may affect a proposed or pending listing, please contact a member of our U.S. or Canadian Capital Markets & Securities teams.