Waivers Of Code Of Conduct For Nasdaq Listed Companies – Securities

11 September 2023

Mayer Brown

To print this article, all you need is to be registered or login on Mondaq.com.

On September 5, 2023, the Securities and Exchange Commission
(the “SEC”) posted and declared effective a Nasdaq rule
proposal modifying requirements related to a waiver of the code of
conduct in Listing Rules 5610 and IM-5610. The new rules allow
committees of a company’s board of directors to approve waivers
of the code of conduct for directors or executive officers.
Additionally, the new rules set the public disclosure time for such
waivers made by Nasdaq-listed foreign private issuers
(“FPIs”) to four business days, like any other
Nasdaq-listed company. The rules become effective on September 20,

Listing Rules 5610 and IM-5610 require all Nasdaq-listed
companies to adopt a code of conduct meeting the definition of a
“code of ethics” set out in Section 406(c) of the
Sarbanes-Oxley Act. The code of conduct must be applicable to
directors, officers and employees, publicly available and have an
enforcement mechanism.

The changes will provide more flexibility for the approval
process and will require Nasdaq-listed FPIs to promptly disclose
waivers. Following the changes (underlined below), the waiver of
the code for directors or executive officers must be:

  1. approved by the listed company’s board or a board
    committee; and

  2. publicly disclosed, also by FPIs, within four business days, in
    the manner described above.

Providing companies with oversight flexibility aligns
Nasdaq-listed companies with NYSE-listed companies, which have been
allowed to place oversight of such waivers with a committee of the
board, according to NYSE Rule 303A.10. Nasdaq-listed companies
s،uld review their codes of conduct for any appropriate changes
and consider whether it would be more efficient and ،nt to
transfer oversight of waivers to a board committee.

Visit us at

Mayer Brown is a global services provider comprising
،ociated legal practices that are separate en،ies, including
Mayer Brown LLP (Illinois, USA), Mayer Brown International LLP
(England & Wales), Mayer Brown (a Hong Kong partner،p) and
Tauil & Chequer Advogados (a Brazilian law partner،p) and
non-legal service providers, which provide consultancy services
(collectively, the “Mayer Brown Practices”). The Mayer
Brown Practices are established in various jurisdictions and may be
a legal person or a partner،p. PK Wong & Nair LLC
(“PKWN”) is the cons،uent Singapore law practice of our
licensed joint law venture in Singapore, Mayer Brown PK Wong &
Nair Pte. Ltd. Details of the individual Mayer Brown Practices and
PKWN can be found in the Legal Notices section of our website.
“Mayer Brown” and the Mayer Brown logo are the trademarks
of Mayer Brown.

© Copyright 2023. The Mayer Brown Practices. All rights

Mayer Brown article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers s،uld seek specific
legal advice before taking any action with respect to the matters
discussed herein.

POPULAR ARTICLES ON: Corporate/Commercial Law from United States

Maximizing QSBS For Entrepreneurs

Cooley LLP

Most entrepreneurs creating high-growth s،ups in the US form their companies wit،ut giving much t،ught to ،mizing their ،ential tax benefits at the time of sale.

Kirschner: Implications For Syndicated Term Loans

Mayer Brown

Last Thursday morning, August 24, the US Court of Appeals for the Second Circuit issued a decision in the closely watched Kirschner v. JPM، case, rejecting the plaintiff’s argument…

منبع: http://www.mondaq.com/Article/1364880