TheCorporateCounsel.net

Shortly after the SEC issued its approval order, Nasdaq posted updated guidance on how the new listing standard’s disclosure requirements will work and the timeline for its implementation.  This excerpt discusses the transition period for compliance with the new standard, which is generally based on a company’s listing tier:

– Nasdaq Global Select Market and Nasdaq Global Market companies will have, or explain why they do not have, one diverse director by the later of two years of the SEC’s approval date (August 7, 2023), and two diverse directors within four years (August 6, 2025), or the date the company files its proxy or information statement (or, if the company does not file a proxy, in its Form 10-K or 20-F) for the company’s annual shareholder meeting in that year.

– Nasdaq Capital Market companies will have, or explain why they do not have, one diverse director by the later of two years from the SEC’s approval date (August 7, 2023), and two diverse directors within five years (August 6, 2026), or the date the company files its proxy or information statement (or, if the company does not file a proxy, in its Form 10-K or 20-F) for the company’s annual shareholder meeting in that year.

Companies with five or fewer directors represent an exception to the tier-based transition period. Regardless of their listing tier, these companies will be required to have at least one diverse director or explain why they don’t by the later of August 7, 2023 or the date the company files its proxy statement for the company’s annual shareholder meeting in that year. For companies that don’t solicit proxies, the compliance date will be the date of filing their 10-K or 20-F for that year.

– John Jenkins