Novell risks being delisted from the Nasdaq stock market because of delays in it filing its most recent quarterly report.

The company has been told by the US Securities and Exchange Commission (SEC) that the delay will see the shares pulled off the technical index, and said it will appeal the decision and request a hearing before a Nasdaq listing panel.

The appeal automatically stays the delisting of Novell's stock while the panel reviews it, but the question of the filing remains. Novell was supposed to file its Form 10-Q report for its third quarter of fiscal 2006 to the SEC earlier this month.

Last week, Novell announced a delay as it waited for the results of a voluntary internal review around the granting of stock options to employees. The company intends to file its 10-Q as soon as the review is complete, but has yet to say when that will be. It has warned that the review may require it to restate earnings.

The delay is also creating tension between Novell and its bank, Wells Fargo. The bank is the trustee of Novell's $600 million-0.50 percent convertible senior debentures, which are due in 2024, and has said Novell is in default under the terms of the indenture. Novell fought this warning as well.

"Novell does not believe that it has failed to perform its obligations under the indenture," the company said in a release. "Therefore, Novell believes that the above-mentioned notice of default is invalid and without merit."

Novell isn't the only IT vendor in hot water with Nasdaq. Dell said this week that it plans to request a hearing before a Nasdaq listing qualifications panel after the exchange informed the vendor that it was not in compliance with filing requirements.

Dell has also delayed the filing of its latest 10-Q report due to "questions raised" by an informal investigation by the SEC into unspecified accounting and reporting matters at the company.