On October 30, 2014, NASDAQ issued a proposed rule change that would require companies to publicly disclose a denial of their listing application by NASDAQ. Under the proposed rule change, a company that receives a determination denying its application for listing would need to make a public announcement within four business days by either:

In the public announcement, companies would be required to:

If a company does not make a public announcement within four business days or does not include all of the required information in its public announcement, NASDAQ may make a public announcement with the required information. Further, if a company appeals a determination under NASDAQ Rule 5815, the Hearings Panel will consider the company's failure to make a public announcement in considering whether to list the company.

The proposed rule change also provides that a company may withdraw its application for initial listing at any time. While NASDAQ has always allowed a company to withdraw its application at any time, the proposed rule change would formally add this to the NASDAQ rules. As a consequence, a company that is informed of NASDAQ's intent to deny its application could still withdraw its application before the application is formally denied without triggering the disclosure requirements discussed above.

The proposed rule change takes effect following approval by the SEC.

Update: On December 11, 2014, NASDAQ issued a replacement filing containing certain modifications to the proposed rule change. The SEC approved the amended proposal on February 13, 2015, as summarized in Legal Update, SEC Approves NASDAQ Proposal on Public Disclosure of Listing Application Denials.

For more information on securities exchanges and how to select the proper exchange, see Practice Note, Selecting a US Securities Exchange.