NASDAQ Issues New FAQ On MarketWatch News Submittals
In November 2023, Nasdaq added a new FAQ providing guidance on completing the electronic disclosure form to provide the required advance notice to Nasdaq’s MarketWatch Department when material non-public information is being announced, including news releases. I realized that while I have blogged about the Nasdaq notification requirements in general (see HERE), the recent changes to the Nasdaq reverse split rules, including MarketWatch notification (see HERE) and Nasdaq continued listing requirements (see HERE), I have not yet drilled down on the Nasdaq Rule 5250(b)(1) MarketWatch disclosure requirements, until now.
As an aside, Nasdaq Rule 5250 is a lengthy rule covering multiple facets of listed company obligations (including the reverse split and notification requirements and several of the corporate governance requirements in the blogs linked to above). This blog focuses on Rule 5250(b)(1) and its related IM discussions related to the disclosure of material non-public information.
Nasdaq Rule 5250(b)(1)
Nasdaq Rule 5250(b)(1) sets forth a listed company’s obligation
Nasdaq Adopts New Reverse Split Rule Change
On November 1, 2023, the SEC approved Nasdaq’s rule changes to the notification and disclosure requirements for reverse splits. The new rules went effective immediately upon approval. For the proposed rule changes see HERE.
Background
After the market highs of the second half of 2020 and all of 2021, we have all witnessed the general decline, including noticeably depressed valuations and market price, especially in the small cap space. In 2022, Nasdaq processed 196 reverse stock splits, compared to 31 in 2021 and 94 in 2020. As of June 23, 2023, Nasdaq has processed 164 reverse stock splits, and projects significantly more throughout 2023. The majority of reverse splits are completed by companies that trade on the Nasdaq Capital Market tier of the exchange and are completing the split to maintain the minimum $1.00 bid price to avoid delisting.
In response to concerns by Nasdaq that market participants do not have enough visibility on these companies or their
