By:  Cydney Posner

On May 15, Nasdaq sent a bulletin to Nasdaq-listed companies outlining the impact on listed companies of Nasdaq's conversion to an Exchange. The bulletin indicates that Nasdaq expects to begin operations as an Exchange in the second quarter of 2006; however, FAQs posted contemporaneously with the bulletin advise that "due to the need to satisfy conditions in the SEC approval order and uncertainties associated with some of these conditions, the actual date may be delayed."

As previously discussed (see my emails of 4/13/06, 2/27/06 and 1/16/06), Nasdaq–listed securities, which are now registered under Section 12(g) of the Exchange Act, will need to be registered under Section 12(b) of the Exchange Act. Ordinarily, this process would require each company to file a separate registration statement with Nasdaq and the SEC. However, Nasdaq has adopted Rule 4130, which permits it to file an application on behalf of its listed companies to register their Nasdaq-listed securities under Section 12(b). Unless a company chooses to opt out on or before May 30, 2006, no action will be required by any listed companies. Companies that opt-out would be ineligible to have their securities trade on Nasdaq unless they separately file a registration statement under Section 12(b) with the SEC.

Nasdaq will advise companies when it begins to operate as an Exchange, at which point, companies should identify themselves as a Section 12(b) registrant in any Exchange Act filings. The bulletin indicates that Nasdaq does not believe that this change in registration status will affect any of the disclosure requirements imposed on Nasdaq-listed companies by the Act. The listing standards and processes will remain unchanged and the delisting process will change slightly to conform to SEC requirements.

This content is provided for general informational purposes only, and your access or use of the content does not create an attorney-client relationship between you or your organization and Cooley LLP, Cooley (UK) LLP, or any other affiliated practice or entity (collectively referred to as "Cooley"). By accessing this content, you agree that the information provided does not constitute legal or other professional advice. This content is not a substitute for obtaining legal advice from a qualified attorney licensed in your jurisdiction, and you should not act or refrain from acting based on this content. This content may be changed without notice. It is not guaranteed to be complete, correct or up to date, and it may not reflect the most current legal developments. Prior results do not guarantee a similar outcome. Do not send any confidential information to Cooley, as we do not have any duty to keep any information you provide to us confidential. When advising companies, our attorney-client relationship is with the company, not with any individual. This content may have been generated with the assistance of artificial intelligence (Al) in accordance with our Al Principles, may be considered Attorney Advertising and is subject to our legal notices.