On the heels of our post of our summary deck yesterday on Nasdaq’s December 2020 Board Diversity Proposal, the SEC announced last night that it needs more time to consider Nasdaq’s proposal and associated comment letters. With the extension, the SEC has until March 11, 2021 to either approve or disapprove the proposal, or institute proceedings to aid its determination.
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Listing Exchanges
Subscribe to Listing Exchanges RSS FeedNasdaq’s Board Diversity Proposal
The SEC continues to consider and take public comment on Nasdaq’s December 2020 Board Diversity Proposal. That proposal, if approved as written, would require Nasdaq-listed issuers to disclose their board diversity composition annually and eventually have two “diverse” directors on their boards, or explain why not. Limited exceptions would also apply.
There’s been much speculation as to whether the SEC will approve these proposed amendments to Nasdaq’s listing requirements, decline to do so, or propose, at some point in time, its own board diversity disclosure requirements.
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Long-Term Stock Exchange Launches
The Long-Term Stock Exchange (LTSE) announced its launch last week for trading stocks on its platform and listing companies on the exchange. As the name suggests, the exchange aims to list companies that desire to create value over time.
The LTSE’s listing requirements take a “principles-based approach” to long-termism (in contrast to a one-size-fits-all approach) requiring listed companies to pledge to operate consistently with five principles:
- Stakeholders.
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NYSE Rule Temporarily Extends Deadline for Brokers to Send Physical Proxy Materials
On April 23, 2020, the New York Stock Exchange (NYSE) proposed a temporary rule change of NYSE Rule 451(b)(1) with immediate effectiveness that extends the deadline by which NYSE member organizations (typically broker/dealers) under selected circumstances must send physical copies of proxy materials to beneficial owners. In light of delays related to the novel coronavirus (COVID-19) pandemic, the NYSE designed the modification with the intention of helping issuers meet their quorum requirements at shareholder meetings and possibly alleviating the need for adjournments or postponements.
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NASDAQ Amends Rule Filing on Disclosure of Third-Party Compensation for Directors and SEC Extends Review Period
The SEC has extended to July 4, 2016, as the deadline for taking action on NASDAQ’s proposal requiring its listed companies to disclose any third-party compensation payments related to candidacy or service as directors on the companies’ boards.
We previously discussed the rule proposal here. Last week NASDAQ amended the rule filing so that the disclosure must be made in the proxy statement for any shareholder meeting that elects directors, not just at annual meetings.
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NASDAQ Proposes Requiring Companies to Disclose Outside Compensatory Payments to Directors
The SEC has published a proposed Nasdaq listing standard for public comment. Comments are due 21 days after publication in the Federal Register, which occurred yesterday.
If adopted, effective June 30, 2016, NASDAQ-listed companies will be required to publicly disclose any agreements with a director or nominee if anyone other than the company provides compensation in connection with that person’s candidacy or service as a director.
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Nasdaq Provided Limited Discretion to Allow Cure Periods for Non-Compliance with Annual Meeting Requirements
The SEC has approved rule changes to allow the staff of Nasdaq’s listing qualifications department limited discretion to grant a listed company time to comply with the requirement to hold an annual meeting.
Nasdaq standards require companies to hold an annual meeting no later than one year after the end of the company’s fiscal year. If a company fails to comply, Nasdaq must issue a delisting determination, subjecting the company to immediate suspension and delisting unless the company requests a hearing.
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