SEC Approves Alternative to $4 Initial Listing Bid Price Requirement for NASDAQ Capital Market | Practical Law

SEC Approves Alternative to $4 Initial Listing Bid Price Requirement for NASDAQ Capital Market | Practical Law

The SEC granted accelerated approval of an alternative to the $4 initial listing bid price requirement for the NASDAQ Capital Market. This alternative permits companies to list with a $2 or $3 minimum closing price if they meet additional listing requirements.

SEC Approves Alternative to $4 Initial Listing Bid Price Requirement for NASDAQ Capital Market

by PLC Corporate & Securities
Published on 24 Apr 2012 • USA (National/Federal)
The SEC granted accelerated approval of an alternative to the $4 initial listing bid price requirement for the NASDAQ Capital Market. This alternative permits companies to list with a $2 or $3 minimum closing price if they meet additional listing requirements.
On April 18, 2012, the SEC granted accelerated approval of a final rule adopting an alternative to the $4 minimum bid price requirement for companies seeking to list on the NASDAQ Capital Market. The final rule adopts the proposed rule and an amendment to the proposed rule (for details on the proposed rule, see Legal Update, NASDAQ Proposes Alternative to $4 Initial Listing Bid Price Requirement for NASDAQ Capital Market).
The amendment revises the proposed rule to, among other things:
  • Change the minimum bid price requirement to require a $3 minimum closing price for five consecutive business days if the issuer meets the equity or net income standards (NASDAQ Rule 5505(b)(1) and 5505(b)(3)) or a $2 minimum closing price for five consecutive business days if the issuer meets the market value of listed securities standard (NASDAQ Rule 5505(b)(2)).
  • Require that a security must have a $4 closing price for at least five consecutive business days before it will be reevaluated under both the qualitative and quantitative initial listing standards for listing under the existing capital market listing requirements.
  • Require daily publication of the list of securities that become subject to the penny stock rules.
Although the SEC is accepting comments on the amendment, the final rule (as amended) will take effect no later than May 23, 2012.