Nasdaq's New 20% Rule Is Good For Listed Companies

Law360 (November 5, 2018, 12:28 PM EST) -- The U.S. Securities and Exchange Commission has approved amendments to Nasdaq's shareholder approval rule regarding issuances of 20 percent or more of an issuer's outstanding common stock or voting power in a private offering. Intended to update Nasdaq's shareholder approval rules from their 1990 adoption and enhance the ability of capital formation without sacrificing investor protections, these changes provide greater clarity and flexibility to Nasdaq-listed companies regarding the appropriate price to use in determining whether shareholder approval is required to issue 20 percent or more of their outstanding securities or voting power in a private placement transaction.

The "20 percent rule,"...

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