Nasdaq Issuer Notice re Cash and Stock Dividends and Distributions

News Brief

By Cydney Posner

Nasdaq has issued a notice to issuers regarding requirements for distributions and dividends, including stock dividends (the most common method for implementing stock splits). (Ok we must be headed for a bubble if Nasdaq is worried about stock splits!)

Pursuant to Listing Rule 5250(e)(6) and Exchange Act Rule 10b-17, the company must notify NASDAQ Corporate Data Operations using the appropriate form as soon as possible after declaration and, in any event, no later than simultaneously with the public notice and at least 10 calendar days prior to the record date of the action. The company must also provide public notice of a dividend action or stock distribution using an FD-compliant method as well as notice to NASDAQ MarketWatch through the Electronic Disclosure submission system.

The following updated forms (which also provide Nasdaq with the 10b-17 notice) should be used for reporting to Nasdaq:

  • Notification: Cash Dividend - Cash dividends or other distributions of cash
  • Notification: Non-Cash Dividend/Distribution - Any non-cash distributions, such as stock splits and dividends, spin-offs or rights offerings

The information in the notifications will be used to determine an ex-dividend date for the distribution, which is the date that the security will start trading without the right to receive the dividend or distribution. The information is subject to immediate public disclosure in connection with Nasdaq's announcement of the ex-dividend date.

A company that fails to provide notification to NASDAQ Corporate Data Operations or NASDAQ MarketWatch may be subject to regulatory proceedings, including the issuance of a deficiency notification, which may lead to delisting proceedings.

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