TheCorporateCounsel.net

Earlier this week, Nasdaq filed a proposal with the SEC that would modify the suspension and delisting processes for SPACs, representing yet another effort to make life harder for the once high-flying acquisition vehicles. As this Cooley blog notes:

Nasdaq has just filed a proposal, Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend Certain Procedures Related to the Suspension and Delisting of Acquisition Companies, designed to address the suspension and delisting process applicable to Acquisition Companies, companies such as SPACs with business plans to complete one or more acquisitions, as described in Rule IM-5101-2. The rule changes would apply to an Acquisition Company that “fails to (i) complete one or more business combinations satisfying the requirements set forth in Listing Rule IM-5101-2(b) (“Business Combination”) within 36 months of the effectiveness of its IPO registration statement; or (ii) meet the requirements for initial listing following the Business Combination.” The proposal would also “limit the Hearings Panels authority to review the Nasdaq Staff’s decision in these instances to a review for factual error only.” Nasdaq also proposes to clarify Listing Rule 5810(c)(1) (with no substantive change) to improve transparency and readability. The rule changes will be operative for Staff Delisting Determination letters issued on or after October 7, 2024.

Nasdaq notes in the filing that the proposal to remove the stay provision so that a SPAC’s securities will be suspended from trading on Nasdaq during the pendency of the Hearings Panel’s review is consistent with the rules of the NYSE.

– Dave Lynn