Nasdaq plans to set a $5 million market value delisting threshold, sparking opposition from small U.S. companies.

October 15, according to Bloomberg, Nasdaq plans to immediately suspend trading of listed companies with a market value below $5 million for 30 days, after which they would face delisting, in order to crack down on manipulation such as "pump-and-dump" schemes in micro-cap stocks. The proposal has been opposed by U.S. domestic small businesses, and regulators have already delayed advancing it last month while further soliciting public comments.

Bloomberg data shows that more than 190 Nasdaq-listed companies currently have a market value of no more than $5 million, about one-third of which are located in Asia and nearly half in the United States. Opposing companies argue that natural price fluctuations caused by thin trading do not equal market manipulation, and the proposal could deter financing and unfairly harm normally operating businesses. Unlike the existing low-share-price delisting rules, which provide a 180-day remediation period, the new proposal does not offer a longer grace period.

Nasdaq, meanwhile, said securities that the market assigns extremely low valuations are more prone to volatility and pose a continuing challenge to fair and orderly trading. NYSE American also proposed a similar $5 million threshold in March this year, and the SEC likewise postponed a final vote.