In September of this year, Nasdaq updated its LAS Form, which stands for the Listing of Additional Shares. NASDAQ also changed the process for reviewing such forms. What does this mean for companies looking to list their shares for sale on the exchange?
Nasdaq Rule 5250
Nasdaq Rule 5250 covers a variety of rules and regulations for companies that list shares for sale on the Nasdaq. The rule includes requirements that indicate companies need to provide certain disclosures to the public and file reports with the SEC regularly.
A few requirements included in the rule are:
- Companies need to file a form with Nasdaq within 10 days of any change in the class of securities greater than 5 percent of the number of outstanding securities.
- Companies need to give Nasdaq 15 days of advance notice before issuing more securities.
- Companies need to give Nasdaq 15 days of advance notice before a substitution listing event takes place.
- Companies must give the exchange at least 10 days of notice before any corporate actions, name changes, and dividends and distributions.
- Companies must notify Nasdaq of any changes in transfer agents.
These requirements are directly related to the Nasdaq LAS form.
LAS: Listing of Additional Shares
All companies listed for sale on the exchange must give Nasdaq at least 15 days of notice before issuing more securities. The LAS form must be filed if:
- A company establishes or changes a stock option plan or purchase plan
- A company issues securities that could lead to a change in the control of the company
- A company issues common stock directly tied to the acquisition of assets of another company
- A company issues common stock that is equal to or greater than 10 percent of the total number of outstanding shares
Nasdaq reviews these forms to make sure that companies comply with all rules and regulations. If companies do not file the necessary forms, Nasdaq could issue a public reprimand or threaten companies with delisting.
A New Notification Form
In the past, many companies listed for trade on the Nasdaq would issue an incomplete LAS Form to start the review process. That way, companies could buy some extra days and submit the remaining information outside of the 15-day window. Now, this has changed, as Nasdaq updated the LAS form.
The new notification form requires certain information about the transaction in question. It cannot be submitted unless the relevant information is included. Furthermore, once the form has been submitted, it cannot be altered or changed. If companies need to make changes to the form after it has been submitted, representatives will need to call the Nasdaq staff or send an email with the request.
Once the form has been submitted, Nasdaq will notify the company that its obligation has been fulfilled. Nasdaq typically reviews the form the next day. After the form has been submitted, Nasdaq might also reach out to the company to ask for more information. The form does not necessarily require any supporting documents.