NASDAQ Submits Proposals Requiring Public Disclosure of Denied Listing Applications

On October 30, 2014, NASDAQ submitted a proposal addressing initial NASDAQ listing applications.  The proposals include that a company could withdraw its initial listing application at any time.  NASDAQ’s policies have always permitted a company to withdraw its initial listing application at any time, and as such, the proposals would formally make this policy part of NASDAQ’s rules.

The proposals would require companies to publicly disclose NASDAQ’s denial of their listing application.  Under the proposals rule, a company whose NASDAQ listing application is denied would be required to make publicly announce the denial within four days by either filing a Current Report on Form 8-K or issuing a press release.

The public disclosure would require that a company:

• Disclose both receipt of the denial and the NASDAQ rule on which the denial is based.
• Describe the specific basis and reasons for NASDAQ’s denial of its listing application.

The proposals include that if a company fails to make the public disclosure within four business days of the denial or does not include all of the required disclosure, NASDAQ may make the required disclosures itself, publicly.  Where an issuer seeks to appeal a NASDAQ listing denial under NASDAQ Rule 5815, the NASDAQ Hearings Panel will consider the company’s failure to make a public announcement in considering whether to allow the company to be listed.

It would be possible under some scenarios for a company that is informed of NASDAQ’s intent to deny its initial application to withdraw the application before it is denied and thereby avoid the disclosure requirements discussed below.

The proposed rule change takes effect upon SEC approval.

For further information about NASDAQ listing requirements or this securities law blog, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com.  This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates 
Brenda Hamilton, Going Public Lawyer
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956