Co-authored by James B. Anderson

On May 19, the Securities and Exchange Commission published a notice soliciting comments on amendments to NASDAQ’s Listing Rules. NASDAQ filed the rule change with the SEC on May 14 and has designated the proposed rule change as constituting a non-controversial rule change, which renders the proposal effective upon filing with the SEC.

Proposed Amendments

The NASDAQ Listing Rules require that a listed company notify NASDAQ when an executive officer of such company becomes aware of any material noncompliance with NASDAQ’s corporate governance requirements contained in the Rule 5600 series. According to the SEC release, NASDAQ has consistently interpreted this notification requirement such that any noncompliance with the corporate governance requirements contained in the Rule 5600 series would be considered material. The proposed amendment to Rule 5625 would clarify this interpretation by NASDAQ by requiring notification of any noncompliance. The proposed amendments would also make conforming changes to Rule 5615(a)(3) and IM-5615-3, which, among other things, require a foreign private issuer to provide notice of noncompliance, and to Rule 5250, which cross references the requirement to provide notice of noncompliance.

Comments should be submitted within 21 days after publication in the Federal Register.

Click here for the full text of the proposed amendments.