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Frequently Asked Questions
  How does Nasdaq's Board Diversity Rule apply to SPACs?
Identification Number 1762
SPACs listed under IM-5101-2 are exempt from Nasdaq’s Board Diversity Rule until they de-SPAC. They are not required to provide board diversity disclosure information or to have, or disclose that they do not have, any minimum number of diverse directors until their business combination.  Following the business combination, such companies have one year to publicly disclose board-level statistics. Companies must meet, or explain why they do not meet, the diverse director objective by the phase-in periods described in Rule 5605(f)(5). 
Publication Date*: 1/16/2023 Mailto Link Identification Number: 1762
Frequently Asked Questions
  Are any companies exempt from Nasdaq's Board Diversity Rule?
Identification Number 1763

Yes. The Board Diversity Rule exempts non-operating companies. Consistent with Nasdaq’s corporate governance rules the following types of companies are exempt:

  • acquisition companies listed under IM-5101-2;
  • asset-backed issuers and other passive issuers. Note while closed end funds are exempt from the rule, business development companies are not (as set forth in Rule IM-5615-4);
  • cooperatives (as set forth in Rule 5615(a)(2));
  • limited partnerships (as set forth in Rule 5615(a)(4));
  • management investment companies (as set forth in Rule 5615(a)(5));
  • issuers of only non- voting preferred securities, debt securities and Derivative Securities (as set forth in Rule 5615(a)(6)); and 
  •  issuers of securities listed under the Rule 5700 Series, including exchange traded products.
Publication Date*: 8/18/2021 Mailto Link Identification Number: 1763
Frequently Asked Questions
  If a company ceases to be an Exempt Company under the Board Diversity Rule, when does that company have to have two diverse directors?
Identification Number 1764

Exempt Companies include acquisition companies listed under IM-5101-2; asset-backed issuers and other passive issuers (as set forth in Rule 5615(a)(1)); cooperatives (as set forth in Rule 5615(a)(2)); limited partnerships (as set forth in Rule 5615(a)(4)); management investment companies (as set forth in Rule 5615(a)(5)); issuers of non- voting preferred securities, debt securities and Derivative Securities (as set forth in Rule 5615(a)(6)) that do not have equity securities listed on Nasdaq; and issuers of securities listed under the Rule 5700 Series.  These companies are exempt from the Diversity Objective contained in Rule 5605(f) and the Board Diversity Disclosure contained in Rule 5606.

Any company that ceases to be an Exempt Company will have until the later of: (i) one year from the date that the company no longer qualifies as an Exempt Company, or (ii) the date the company files its proxy statement or its information statement (or, if the company does not file a proxy, in its Form 10-K or 20-F) for the company’s first annual meeting of shareholders subsequent to such event to satisfy the requirements of Rule 5605(f).

Publication Date*: 1/16/2023 Mailto Link Identification Number: 1764
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