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Frequently Asked Questions
  When is a company required to file the LAS Notification?
Identification Number 382
All companies listed on the Nasdaq Stock Market, except companies that list only ADRs or ADSs, are required to notify Nasdaq at least 15 calendar days prior to:
  • Issuing any common stock, or security convertible into common stock, in connection with the acquisition of the stock or assets of another company, if any officer or director or substantial shareholder of the issuer has a five percent or greater interest (or if such persons collectively have a 10% or greater interest), directly or indirectly, in the company or assets to be acquired or in the consideration to be paid.
  • Issuing securities that may potentially result in a change of control of the issuer.
  • Establishing, or materially amending, a stock option plan, purchase plan or other equity compensation arrangement, pursuant to which stock may be acquired by officers, directors, employees, or consultants unless shareholder approval has been obtained. However, when a company makes an equity grant to induce an individual to accept employment, notification is required to be filed no later than the earlier of: (i) five calendar days after an offer of employment is accepted, or other agreement made, pursuant to which inducement grants will be issued; or, (ii) the date the company discloses the material terms of the grant in a press release.
  • Issuing any common stock, or any security convertible into common stock, in a transaction that may result in the potential issuance of common stock, greater than 10% of either the total shares outstanding or the voting power outstanding on a pre-transaction basis.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 382
Frequently Asked Questions
  Where are the necessary listing forms and instructions to list on Nasdaq?
Identification Number 332
Listing applications and related forms are available electronically through the Nasdaq Listing Center. Before completing your application electronically, please take a few minutes to review our Initial Listing Guide. Generally, the company will need to complete the Listing Application, Listing Agreement, Corporate Governance Certification Form and Logo Submission Form. If you are unfamiliar with the contents of the Listing Application and related forms, we recommend that you preview the forms prior to logging into the Listing Center. This will help you gather all the information you will need to complete the forms.  Questions regarding the listing process should be directed to Listing Qualifications Staff at +1 301 978 8008.
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 332
Frequently Asked Questions
  Is shareholder approval required of an equity award to a new employee?
Identification Number 247
Under Listing Rule 5635(c)(4) shareholder approval is not required of an issuance to a person not previously an employee or director of the company, or following a bona fide period of non-employment, as an inducement material to the individual's entering into employment with the company, provided that such an issuance is approved by the company's compensation committee or a majority of the company's independent directors. In addition, the company must issue a press release promptly following the grant, which discloses the material terms of the award. 
 
Publication Date*: 11/26/2019 Mailto Link Identification Number: 247
Frequently Asked Questions
  Is there a document that describes Nasdaq's Listing of Additional Shares notification requirements?
Identification Number 1050

No. Please review these FAQs for important information about Nasdaq's LAS notification and timing requirements.

 
Publication Date*: 11/30/2017 Mailto Link Identification Number: 1050
Frequently Asked Questions
  What is required for a company to rely on the exception from the shareholder approval requirement for an equity compensation inducement award?
Identification Number 253
In order to rely on the exception from the shareholder approval requirement for equity compensation awarded as an inducement material to the individual's entering into employment with the company, the issuance must be approved by the company's compensation committee or a majority of the company's independent directors. In addition, the company must issue a press release promptly following the grant, which discloses the material terms of the award.
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 253
Frequently Asked Questions
  How is the percentage of shares of common stock to be issued in a transaction calculated?
Identification Number 182
The percentage of shares of common stock to be issued in a transaction is calculated using the following formula:
 
Maximum Potential Issuance of Shares of Common Stock
Pre-transaction Issued and Outstanding Shares of Common Stock
 
To correctly calculate the percentage of shares to be issued, the numerator of this equation must contain all securities initially issued or potentially issuable or potentially exercisable or convertible into shares or common stock as a result of the transaction (e.g., earn-out clauses, penalty provisions, equity compensation awards assumed or in assumed plans, etc.).
 
To correctly determine the denominator, the company should use only issued and outstanding shares. If the company has multiple classes of common stock, all shares should be added together (see FAQ #288). However, the denominator should not assume the conversion or exercise of any options, warrants or other convertible securities.
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 182
Frequently Asked Questions
  How does Nasdaq determine compliance with the minimum round lot shareholder requirement for initial listing?
Identification Number 1415

Nasdaq requires at least 300 round lot holders for listing on the Nasdaq Capital Market, 400 round lot holders for listing on the Nasdaq Global Market, or 450 round lot holders for listing on the Nasdaq Global Select Market. A round lot holder must hold at least 100 unrestricted shares of the security. In addition, at least 50% of the company’s required number of round lot holders (e.g., 150, 200 and 225 round lot holders for Nasdaq Capital Market, Nasdaq Global Market and Nasdaq Global Select Market, respectively) must each hold unrestricted securities with a market value of at least $2,500. If it is not clear from a company's public disclosures that it satisfies these round lot shareholder requirements, Nasdaq will typically request from the issuer, and review, registered shareholder lists from the company's transfer agent, data from Cede & Co about shares held in street name, and data from other providers showing the number of account holders, such as a share range analysis from Broadridge or a list of beneficial holders through a broker/dealer search.

Nasdaq will aggregate information on these lists for accounts held by the same person to eliminate duplicates from the count, including individual and retirement accounts for the same person. Nasdaq may also aggregate accounts that appear to represent a single investment decision, such as separate accounts for an individual and his or her minor children. In general, Nasdaq will seek to insure that each account represents a separate investment decision by a bona fide holder and, for this reason, would also exclude accounts that only hold shares that were given as gifts or for minimal consideration to the holder, especially if such gifts were made to allow the company to satisfy Nasdaq's listing requirements.

Given the nature of this review, determining compliance with the holder requirement can be a time consuming process. Companies are therefore encouraged to work proactively with staff to facilitate this review and begin the process as soon as possible to allow the company to demonstrate compliance on the schedule it wishes.

Publication Date*: 8/18/2017 Mailto Link Identification Number: 1415
Frequently Asked Questions
  For purposes of Nasdaq's shareholder approval rules, what is "Minimum Price" and "Market Value"?
Identification Number 271

Nasdaq rules require shareholder approval for certain transactions that are priced below the "Minimum Price," as defined in Nasdaq's rules. Under Listing Rule 5635(d), shareholder approval is required in connection with a transaction, other than a public offering, at a price below the Minimum Price involving the sale, issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable for common stock), which alone or together with sales by officers, directors or Substantial Shareholders of the Company, equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance. Listing Rule 5635(d) defines "Minimum Price" as the lower of: (i) the closing price (as reflected on Nasdaq.com); or (ii) the average closing price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement. Please note that the Nasdaq Official Closing Price is different from the Closing Price. For purposes of Listing Rule 5635(d), the “closing price” means the Nasdaq Official Closing Price, available at https://www.nasdaq.com/market-activity/quotes/historical-nocp. See also FAQ #272.     

In addition, under Listing Rule 5635(c), shareholder approval is required for any issuance to an officer, director, employee or consultant of the company at a price less than market value. For this purpose, Listing Rule 5005(a)(23) defines "market value" as the consolidated closing bid price per share immediately preceding the entering into of the binding agreement to issue the securities.

If the transaction is entered into during market hours, before the close of the regular session at 4 PM Eastern Time, market value or Minimum Price are determined based on the previous trading day's closing bid or closing price (or the average closing price for the previous five trading days), as applicable. If the transaction is entered into after the close of the regular session, then that day's closing bid or closing price (or the average closing price for that day and the previous four trading days) is used. Please note that the closing price (Nasdaq Official Closing Price) may differ from the consolidated closing bid price and, therefore, a transaction priced at or above the Minimum Price may still be at a discount to market value for purposes of Listing Rule 5635(c). See also FAQ #275.

Publication Date*: 11/26/2019 Mailto Link Identification Number: 271
Frequently Asked Questions
  How do I create a new Listing of Additional Shares Notification Form?
Identification Number 51
Click on the Create New Form tab at the top of the Listing Center home page. Then select U.S. Market: Nasdaq from the Select Listing Center drop down menu. Afterwards you will be given a choice of the form to fill out. Select Listing of Additional Shares Notification Form. Then enter unique company identifiers such as ticker and CUSIP or CIK and hit the Enter button.
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 51
Frequently Asked Questions
  Does a sale of securities in a transaction (other than a public offering) at a discount to the market value to officers, directors, employees, or consultants require shareholder approval under Listing Rule 5635(c)?
Identification Number 275

Yes. The issuance of common stock (or equivalents) or securities convertible into or exercisable for common stock to officers, directors, employees, or consultants at a price less than the market value of the stock is considered a form of "equity compensation" and requires shareholder approval unless the issuance is part of a public offering (as described in IM-5635-3). For this purpose, market value is the consolidated closing bid price immediately preceding the time the company enters into a binding agreement to issue the securities.

Issuances to an entity controlled by an officer, director, employee, or consultant of the listed company may also be considered equity compensation under certain circumstances, such as where the issuance would be accounted for under Generally Accepted Accounting Principles as equity compensation or result in the disclosure of compensation under the applicable provisions of Regulation S-K.

Note that this provision also applies to limited partnerships, which are required by Rule 5615(a)(4)(H) to obtain the same approval for equity compensation as would be required under Rule 5635(c) and IM-5635-1. Also note that the Minimum Price, as defined in Listing Rule 5635(d), is not applicable to Listing Rule 5635(c) and thus is not relevant to this FAQ.

A company considering an issuance to an entity controlled by an officer, director, employee, or consultant is encouraged to contact its Listing Qualifications analyst by phone at +1 301 978 8008 to discuss the transaction prior to entering into a definitive agreement.

Publication Date*: 10/10/2018 Mailto Link Identification Number: 275
material_search_footer*The Publication Date reflects the date of first inclusion in the Reference Library, which was launched on July 31, 2012, or a subsequent update to the material. Material may have been previously available on a different Nasdaq web site.
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