A big topic for discussion this week has been whether companies will elect to proceed with IPOs while the SEC Staff is furloughed during the government shutdown, following the updated Rule 430A guidance that Meredith discussed last Friday. While the SEC guidance is potentially helpful to companies considering IPOs in the near term, it is also important to consider the approach that the stock exchanges will take with respect to listing companies that may have not completed (or even started) the Corp Fin review process.

In updated FAQs posted by Nasdaq when the current government shutdown began, the exchange provided the following relevant guidance:

Q: Would Nasdaq list a company that had cleared all SEC comments before the shutdown?

Nasdaq generally would list a company that satisfies the listing requirements if the company cleared all SEC comments before the shutdown, regardless of whether the registration statement was already effective before the shutdown or becomes effective during the shutdown pursuant to the provisions of section 8(a) of the 1933 Act.

Q: Would Nasdaq list a company with outstanding SEC comments?

In limited situations, where the company has substantially completed the comment process before the shutdown and acquiesces to any outstanding SEC comments in a manner that clearly addresses the SEC comment, Nasdaq would consider listing the company upon its registration statement becoming effective. In making a determination, among other factors, Nasdaq will consider the nature and materiality of the outstanding comments, the history of the company and any prior review of its filings by the SEC, and whether the company’s counsel and auditor are willing to represent that they believe all disclosure and accounting comments, respectively, have been fully addressed. In addition, Nasdaq would consider any supplemental disclosure related to the shutdown, such as additional risk factors. Any company that believes it is in this situation and considering whether to proceed should contact Nasdaq’s Listing Qualifications Staff at + 1 301 978 8008 or DL -lnitialListingTeam@nasdag.com.

Q: Would Nasdaq list a company that had not yet received SEC comments or that first filed a registration statement during the shutdown?

Notwithstanding the ability for a registration statement to become effective during the shutdown, the U.S. capital markets depend upon the accuracy and completeness of registration statements and SEC review has been a longstanding part of this process. At this time, Nasdaq would not generally list a company in connection with an IPO unless the company has substantially completed the comment process with the SEC on its 1933 Act registration statement prior to the shutdown. However, Nasdaq recognizes the uncertain duration of the shutdown and its effects on companies. We are open to discussions with the government and legal, audit and banking advisors on controls, standards and processes that could adequately protect investors while allowing capital raising activity to continue. Nasdaq may revisit its position in light of any such discussions.

Q: Can a company currently trading in the over-the-counter market list on Nasdaq during the shutdown?

A company currently trading in the over-the-counter market that satisfies Nasdaq’s listing requirements can file a 1934 Act registration statement to list on Nasdaq, and Nasdaq will certify that registration statement. However, if a company trading on the over-the-counter market must file a 1933 Act registration statement to raise capital to satisfy Nasdaq’s listing requirements, Nasdaq will treat it similarly to the way we treat an IPO (as discussed above) – we will not approve the application unless the company has received and addressed all SEC comments on that registration statement.

– Dave Lynn