The SEC has approved a Nasdaq rule change to permit Nasdaq to exercise discretion to grant an extension to regain compliance before delisting a company that fails to hold an annual meeting. In determining whether to grant a company an extension to comply with the annual meeting requirement, Nasdaq will consider the likelihood that the company would be able to hold an annual meeting within the exception period, the company’s past compliance history, the reasons for the failure to timely hold an annual meeting, corporate events that may occur within the exception period, the company’s general financial status, and the company’s disclosures to the market. This review will be based on information provided by a variety of sources, which may include the company, its audit committee, its outside auditors, the staff of the SEC and any other regulatory body. The proposed rule change will limit the length of an extension granted by staff, upon review of the plan to regain compliance, to no more than 180 calendar days from the deadline to hold the annual meeting (i.e., one year after the end of the Company’s fiscal year).
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