In Light of Market Turmoil, Nasdaq Would Suspend Closing Bid Deficiency Test

Noting that the market turmoil has resulted in a number of securities trading below $1, Nasdaq proposes to suspend the bid price and market value of publicly held shares requirements through January 16, 2009. Currently, Nasdaq rules provide that a security will be considered deficient if it fails to achieve at least a $1 closing bid price for a period of 30 consecutive business days. Nasdaq urged the SEC to make the change effective immediately upon Commission approval and waive the usual 30-day operative delay period.

Under the proposal, which must be approved by the SEC, companies would not be cited for new bid price or market value of publicly held shares deficiencies during the suspension period. In addition, the time allowed to companies already in a compliance period or in the hearings process for bid price or market value of publicly held shares deficiencies would be suspended with respect to those requirements.

Following the temporary suspension, any new deficiencies with the bid price or market value of publicly held shares requirements would be determined using data starting on January 19, 2009. Companies that were in a compliance period prior to the suspension would receive the balance of any pending compliance periods in effect at the time of the suspension. Similarly, companies that were in the hearings process prior to the suspension would resume in that process at the same stage they were in when the suspension went into effect. Nasdaq will continue to monitor securities to determine if they regain compliance during the temporary suspension.

Nasdaq is acting to provide this relief because it believes that companies whose shares fell below $1 during this time of market turmoil have not experienced a fundamental change in their underlying business model or their prospects. Rather, the decline in general investor confidence has resulted in depressed pricing for companies that otherwise remain suitable for continued listing. At the same time, current market conditions make it difficult for companies to successfully implement a plan to regain compliance with the price or market value of publicly held shares tests.

Nasdaq further believes that this temporary suspension will permit companies to focus on running their businesses, rather than on satisfying market-based requirements that are largely beyond their control in the current environment. Moreover, the temporary suspension will allow investors to buy shares of some of these lower-priced securities without fear that the company will receive a delisting notification or be delisted in the very near term.