Public companies trading near minimum listing thresholds may soon have less time to respond to share-price declines. The Securities and Exchange Commission has approved a significant change to the NYSE American continued listing standards. Effective July 1, 2027, a listed security with a closing price below $0.25 on any trading day will be subject to immediate trading suspension and delisting proceedings, without access to the ordinary compliance procedures available for many other listing deficiencies.
The SEC approved the rule on August 14, 2026, as modified by Amendment No. 4, and the approval order was published in the Federal Register on August 18, 2026. Amendment No. 4 delayed the effective date from October 1, 2026, to July 1, 2027, giving issuers additional time to evaluate their compliance position and, where appropriate, implement a reverse stock split or pursue other measures to increase their trading price.
The final rule also expands NYSE American’s express authority to act when a security experiences a precipitous price decline to an abnormally low level from which the exchange believes it is unlikely to recover. Together, these changes reduce the circumstances in which issuers may have extended time to address very low trading prices once the rule becomes effective.
NYSE American Establishes a $0.25 Minimum Trading Price
If a security’s closing price per share is below $0.25 on any trading day, NYSE American will immediately suspend trading and commence delisting proceedings.
The trigger is based on a single trading day’s closing price. It is not based on a 30-day average, a consecutive-day measurement period or a prolonged period of trading below the threshold.
This represents a material change from NYSE American’s prior administration of low-priced securities. Previously, the Exchange addressed extremely low-priced securities through its discretionary authority and a policy under which suspension and delisting proceedings typically would be initiated when a stock traded below $0.10 per share. The approved rule replaces that policy-based threshold with an express $0.25 closing-price requirement, providing a clearer and significantly higher trigger for immediate suspension and delisting proceedings.
No Ordinary Compliance Period for a $0.25 Price Deficiency
Companies falling below the $0.25 threshold will not be entitled to follow the ordinary procedures under Section 1009 of the NYSE American Company Guide for that deficiency. Those procedures generally provide a framework through which an issuer may submit a plan or receive time to regain compliance with certain continued listing standards.
Under the new rule, a closing price below $0.25 will instead result in immediate suspension and the commencement of delisting proceedings. Issuers will retain the right to appeal an NYSE American delisting determination pursuant to the Exchange’s procedures; however, the existence of appeal rights does not create an ordinary compliance period before suspension under the new rule.
This makes advance planning particularly important. Once the rule becomes effective, an issuer cannot assume that it will have additional time after crossing the threshold to complete shareholder approvals, amend its governing documents, or implement a reverse stock split.
NYSE American May Act Before a Security Falls Below $0.25
The final rule also expressly provides that NYSE American may suspend or delist a security when the trading price has experienced a precipitous decline and is at an abnormally low level from which it is unlikely to recover, even if the security has not closed below $0.25.
This provision gives the exchange discretion to respond to severe price deterioration without waiting for the numerical threshold to be crossed. As a result, companies should not view $0.25 as the only relevant trigger. The pace and severity of a decline, together with the trading level reached, may also affect listing risk.
The rule does not establish a separate numerical test for what constitutes a precipitous decline or an abnormally low level. Issuers experiencing sharp price movements should therefore engage with legal counsel and NYSE American early rather than relying exclusively on a threshold-based monitoring process.
Reverse Split Planning Takes on Greater Importance
Unlike a market-capitalization requirement, a minimum share-price requirement may be addressed directly through a reverse stock split. The delayed July 1, 2027 effective date is intended to provide issuers time to evaluate and, where appropriate, implement reverse splits before the new requirement becomes operative.
However, reverse split flexibility is not unlimited. NYSE American’s existing rules remain in place, including restrictions on:
- One or more reverse stock splits with a cumulative ratio of 200-to-1 or greater over a two-year period; and
- A reverse stock split that causes the issuer to fall below another continued listing requirement.
Companies should review their reverse split history, authorized share structure, shareholder approval requirements, continued listing metrics and anticipated post-split trading profile well before the effective date.
A reverse split may increase the per-share price mechanically, but it does not change the company’s underlying equity value. Companies should also consider whether the post-split price is likely to remain above the threshold and whether the transaction could affect public float, financing arrangements, outstanding equity-linked securities or compliance with other NYSE American requirements. Issuers should also evaluate broader market effects, including potential impacts on liquidity, institutional investor participation and analyst coverage.
The Earlier $5 Million Market-Capitalization Proposal Was Removed
NYSE American’s initial proposal included a separate provision that would have subjected an issuer to immediate suspension and delisting if its average global market capitalization remained below $5 million over 30 consecutive trading days.
This provision was removed in Amendment No. 3, and Amendment No. 4 did not restore it. Accordingly, the final approved rule does not contain the earlier proposed $5 million market-capitalization trigger.
The final rule is therefore principally focused on trading price rather than total market capitalization. Issuers must still comply with NYSE American’s other continued listing standards, including applicable requirements relating to stockholders’ equity, publicly held shares, public shareholders and aggregate market value of publicly held shares.
What NYSE American Issuers Should Do Before July 1, 2027
The delayed effective date provides time to prepare, but issuers with low or volatile share prices should not wait until the rule becomes operative.
Key considerations include:
- Monitor closing price and volatility. Companies should monitor both proximity to the $0.25 threshold and whether a rapid decline could attract scrutiny under the exchange’s discretionary authority.
- Review reverse split capacity. Analyze prior reverse splits, cumulative ratios, shareholder authorization, charter limitations, required approvals and the time needed to implement a transaction.
- Model all continued listing requirements. Confirm that a reverse split or related capital action will not create a new deficiency involving public float, shareholders, equity, market value or another listing requirement.
- Review outstanding securities and agreements. Assess the effects on warrants, options, convertible debt, preferred stock, equity compensation plans, financing covenants and registration obligations.
- Evaluate financing and capital alternatives. Consider whether a financing, recapitalization, strategic investment, business combination or other transaction could improve the company’s trading profile and overall listing position.
- Maintain appropriate investor communications. Communicate material business developments and supportable value catalysts while avoiding promotional activity that could raise concerns about market manipulation.
- Prepare a listing contingency plan. Companies at greater risk should understand the legal, financing, operational and investor-relations consequences of a trading suspension or potential transition to an alternative market.
- Reassess exchange suitability. Recent rulemaking has highlighted meaningful differences between the U.S. exchanges. NYSE American ultimately removed its proposed $5 million market capitalization continued listing requirement but adopted enhanced low-price delisting authority, while Nasdaq’s SEC-approved (but currently stayed) $5 million MVLS requirement would place greater emphasis on maintaining market value. Companies should evaluate whether Nasdaq Capital Market or NYSE American is the better fit based on their market capitalization, share price, liquidity profile, financing strategy and anticipated compliance risks. Issuers with relatively stronger market values but lower trading prices may view Nasdaq’s framework differently than issuers whose trading-price profile is stronger than their market-value metrics.
Takeaway: The Transition Period Is a Planning Opportunity
NYSE American’s final rule establishes a clear and significantly higher minimum trading-price threshold, but it also gives issuers until July 1, 2027 to prepare.
For companies trading near the threshold, the principal risk is not simply a prolonged low-price deficiency. A single closing price below $0.25 can trigger immediate suspension and delisting proceedings once the rule becomes effective, and the exchange may act sooner following a precipitous decline to an abnormally low level.
Companies should use the transition period to understand their exposure, preserve reverse split flexibility, assess other continued listing requirements and develop capital and communications strategies before a deficiency arises.
Companies planning to go public should also keep these new rules in mind when selecting an exchange and when structuring the transaction to support long-term listing compliance.
Stay Ahead of Evolving Listing Standards with Grassi
Grassi’s SEC & Capital Markets team advises public companies, micro-cap issuers, SPAC sponsors and growth-stage companies throughout the public-company lifecycle. From IPO readiness and PCAOB audits to SEC reporting, exchange compliance and capital markets advisory, we help companies evaluate their position and respond proactively as listing standards evolve.
Contact a Grassi advisor today to discuss how NYSE American’s new minimum trading-price rule may affect your company’s listing strategy, capital plan or reporting obligations..
Frequently Asked Questions
What is NYSE American’s new minimum trading-price requirement?
Effective July 1, 2027, an NYSE American-listed security with a closing price below $0.25 on any trading day will be subject to immediate trading suspension and delisting proceedings.
Is there a compliance or cure period?
The issuer will not be entitled to the ordinary Section 1009 compliance procedures for a $0.25 minimum trading-price deficiency. Issuers retain the right to appeal an exchange delisting decision.
Does a company need to trade below $0.25 for multiple days?
No. The rule is triggered if the security’s closing price is below $0.25 on any trading day after the rule becomes effective.
Can NYSE American act before the stock closes below $0.25?
Yes. NYSE American may suspend or delist a security following a precipitous decline to an abnormally low level from which the exchange believes it is unlikely to recover, even if the security has not fallen below $0.25.
Can a reverse stock split address the requirement?
A reverse split may increase the per-share trading price, but companies must consider existing NYSE American restrictions, including the cumulative 200-to-1 limit over two years and the prohibition on a split that creates another continued listing deficiency.
Did NYSE American adopt the proposed $5 million market-capitalization requirement?
No. Amendment No. 3 removed the proposed $5 million average market-capitalization trigger, and it is not included in the final approved rule.
What should listed companies do before July 1, 2027?
Companies should monitor their closing price and volatility, review reverse split capacity and prior split history, evaluate all continued listing requirements, assess outstanding securities and financing agreements and prepare capital and listing contingency plans.
Disclaimer: This article is for informational purposes only and is not legal, accounting, tax or investment advice. Consult appropriate advisors regarding your specific facts.
