The "20% Rule"

Over the years we have written a fair bit about Nasdaq's (and other securities exchanges') rules requiring shareholder approval in connection with certain private placements, change of control transactions, and financings in connection with an acquisition.  Oftentimes, the shareholder vote requirement, in its current form, is a significant impediment to capital-raising transactions that are in the listed company's best interests.  Recently, Nasdaq posted a request for comment on various aspects of these rules.

In light of the significance of these rules for Nasdaq-listed companies and the effect of such rules on transactions, such as private placements, PIPE transactions, and registered direct offerings, and their often disproportionate impact on smaller reporting companies, we encourage market participants to consider submitting comments before the February 15th deadline.  See the request here: