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Nasdaq, Inc. (Nasdaq:NDAQ) today announced that The Nasdaq Stock Market (“Nasdaq”) is soliciting public comments as to whether and how to update and improve its shareholder approval rules.
Nasdaq’s shareholder approval rules provide crucial investor protections. However, since these important rules were adopted 25 years ago, the capital markets and securities laws, as well as the nature and type of share issuances, have evolved significantly. Over that time other investor protection mechanisms have been put in place, including, for example, requirements for majority independent boards and stronger corporate governance practices by listed companies. As a result, certain provisions of the shareholder approval rules may no longer be necessary for their original shareholder protection purpose and the need to structure transactions around these provisions could result in unnecessary costs.
Nasdaq therefore believes it is appropriate and timely to review whether the shareholder approval rules can be updated and improved, without sacrificing the crucial investor protections they provide and is seeking comments from listed companies, investors, and other market participants on these questions.
Nasdaq encourages all interested parties to review the request for comment, available on the Governance Clearinghouse webpage, and provide comments by February 15, 2016.
