Nasdaq Provides Temporary Exception To Certain Shareholder Approval Requirements

The SEC has declared immediately effective new Nasdaq Rule 5636T, which will provide a temporary exception,  through June 30, 2020, from the shareholder approval requirements for certain issuances of 20% or more of the outstanding shares (Rule 5635(d)) and for a narrow subset of capital-raising issuances that could be considered equity compensation (Rule 5635(c)).  Given that stay-at-home orders in effect in many communities have wreaked havoc on the revenue streams of many businesses, companies may have urgent needs to raise capital.  Nasdaq believes that this temporary exception "will permit companies to raise capital quickly to continue running their businesses and address the immediate health crisis caused by the COVID-19 pandemic, including its impact on their employees, customers, and communities."