The US banking giant has offered $10.8 billion, or 1,359 yen per share, for a majority stake in the company and has refused to yield to overtures from US banks such as Mackenzie and Harris Associates to up its offer.
Market analysts had predicted that if Nikko had been de-listed, a consequent share price drop for the scandal-hit brokerage would see shareholders accept Citigroup's bid.
However, it is thought that the TSE's decision may give renewed confidence to shareholders to push for a fee closer to the current listed share price of 1,490 yen - ten per cent above Citigroup's bid.
Natsumu Tsujino, of JP Morgan, told Reuters: "The TOB (take over bid) price likely factored in the risk of delisting, and we think that opposition to it could now spread well beyond just the four major shareholders who have already expressed their disapproval."
The threat of delisting for Nikko,came after revelations about falsified profits, over which six high-ranking members of staff were forced to resign in December of last year.