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NASDAQ Proposes to Extend Minimum Bid Price Rule Compliance Periods
Thursday January 30, 6:20 pm ET
Measures Provide Option to Companies Meeting Heightened Financial Requirements
NEW YORK, Jan. 30 /PRNewswire-FirstCall/ -- The NASDAQ Stock Market, Inc. (NASDAQ®) announced plans to extend a pilot program governing bid price rules for all NASDAQ National Market® and NASDAQ Small Cap® issuers. The proposal will allow issuers that meet heightened financial requirements to benefit from extended compliance periods for satisfying minimum bid price requirements.
"Extending the pilot program is a prudent and appropriate response to current economic conditions," commented Rick Ketchum, president and deputy chairman of NASDAQ. "Qualified companies in compliance with core listing criteria deserve a fair opportunity to execute business plans and demonstrate full compliance in a reasonable timeframe appropriate to this challenging financial environment."
First enacted a year ago, the pilot program provides issuers additional time to address bid price deficiencies that may be attributable to the continuing economic downturn and the related decline in the broad market averages. The extended grace periods are consistent with the rules of the other major U.S. markets, although no other market conditions its grace period on compliance with initial listing standards. Under the new proposal, NASDAQ will extend the program expiration from December 31, 2003 to December 31, 2004.
"The amendment will lessen potential disruption to investors, who will have more time to make informed investment decisions while continuing to trade in a regulated, liquid and transparent market," said Ginger Ehn Lew, a member of the NASDAQ Listing and Hearing Review Council and Chief Executive Officer and Managing Director of the Telecommunications Development Fund. "At the same time, the Council felt it was important that companies making use of the grace period option meet tougher overall financial requirements."
The proposed rule changes would:
* Extend the bid price grace period for all National Market issuers
from 90 calendar days to 180 calendar days and provide an additional
180 calendar day grace period for those National Market issuers able
to demonstrate compliance with the core National Market initial
listing criteria.
* Maintain the initial 180 calendar day bid price grace period for all
SmallCap issuers, but extend the bid price grace period for SmallCap
issuers demonstrating compliance with the core SmallCap initial
listing criteria from 180 to up to 540 days (approximately 18
months). Compliance with this standard will be verified every 180
days.
* Extend the pilot program expiration from December 31, 2003 to
December 31, 2004.
The proposal, approved yesterday by the NASDAQ Board of Directors and today by the NASD Board of Directors, is the result of recommendations by the NASDAQ Listing and Hearing Review Council, an independent advisory panel. NASDAQ will present the overall plan to the Securities and Exchange Commission for approval prior to implementing the proposed changes.
About NASDAQ
NASDAQ (OTC Bulletin Board: NDAQ - News) is the world's largest electronic stock market. With approximately 3,700 companies, NASDAQ lists more companies and trades more shares per day than any other U.S. market. It is home to category-defining companies that are leaders across all areas of business including technology, retail, communications, financial services, media and biotechnology industries. NASDAQ is a key driver of capital formation. For more information about NASDAQ, visit the NASDAQ Newsroom at nasdaqnews.com.
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Source: The NASDAQ Stock Market, Inc. |
