SEC permits EDGAR filings to satisfycertain Nasdaq manual filing obligations

By: Cydney Posner

In connection with its transition to exchange status, the Nasdaq Exchange, on behalf of its listed companies and third-party filers, submitted to the SEC a no-action request with respect to their obligations to file information with the Nasdaq Exchange. More specifically, Nasdaq requested that the requirement to file with Nasdaq be deemed satisfied by the filing of the information on EDGAR and that the documents filed through EDGAR be deemed to have been received and maintained by the Nasdaq Exchange, as required under Rule 17a-1 of the Exchange Act. On August 1, Corp Fin issued its response that it would not recommend enforcement action if Nasdaq-listed issuers and third parties required to file documents with respect to Nasdaq-listed issuers use documents filed by EDGAR to satisfy their obligations under the Securities Act or the Exchange Act to file copies of certain documents with the Nasdaq Exchange.

This no-action relief applies to filings such as Forms 144, Schedules 13D/G and Forms 3,4 and 5 that, as a result of Nasdaq's exchange status, would now otherwise be required to be filed manually with the Nasdaq Exchange. If filings are not made on EDGAR, a copy of these filings will need to be sent to Nasdaq Listing Qualifications.

Other changes resulting from Nasdaq's transition to exchange status include:

• Registration has now been effected for Nasdaq-listed issuers under Exchange Act section 12(b), instead of 12(g) and should be so reflected on appropriate SEC filings (see my email of 7/31/06) (Note that companies should continue to file Exchange Act reports using the same file number (00X-XXXXX) that they were previously assigned by the SEC);
• The delisting process will be modified slightly to conform with SEC requirements under Rule 12d2-2 for exchange delistings, including the requirement to file a Form 25 with the SEC to remove the security from listing and/or withdraw it from registration under Section 12(b) of the Exchange Act (see my email of 7/15/05);
• Securities of companies listed on the Nasdaq Global Market (including its upper-crust segment, the Nasdaq Global Select Market), as a successor to the Nasdaq National Market, would, according to Nasdaq, continue to be "covered securities", and Section 18(b) of the Securities Act does expressly refer to successor entities to the Nasdaq National Market. (However, some commentators have argued that the bifurcation creates some ambiguity as to whether both tiers are successors. There may be similar questions raised regarding the application of Section 2115.) Even though Nasdaq is an exchange, securities of companies listed on the Nasdaq Capital Market (formerly, the Nasdaq SmallCap Market) are not "covered securities" under NSMIA. Nasdaq has, however, submitted to the SEC a request for rulemaking petition to designate securities listed on the Nasdaq Capital Market as "covered securities" for purposes of NSMIA; and
• Because Nasdaq is now operating as an independent SRO, separated from the NASD, it has a separate rules manual.

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