07:55 AM EDT, 08/09/2024 (MT Newswires) -- Nasdaq (NDAQ) on Thursday filed a proposal with the US Securities and Exchange Commission for stricter delisting rules on penny stocks.

The proposed changes would speed the process of delisting companies that fail to comply with the minimum closing price requirement of $1 per share, according to filing with the SEC.

Companies whose share price remains below $1 for 360 trading days would be suspended from trading, Nasdaq said. This would remove the current option for non-compliant companies to request a 180-day extension after failing to comply within the first 180 days of notice.

If a non-compliant company effects a reverse stock split to keep its share price above $1 within the proposed one-year compliance period, Nasdaq would immediately send a delisting notice, according to the proposal.

"Nasdaq believes that such behavior is often indicative of deep financial or operational distress within such companies rendering them inappropriate for trading on Nasdaq for investor protection reasons," the exchange operator said.