Nasdaq Appeals Process
Frequently Asked Questions
Appeals Process
After the company has attended a hearing and has received an unfavorable decision, it may wish to appeal to the NASDAQ Listing and Hearings Review Council ("NLHRC"). The NLHRC may also decide to review the Panel's decision on its own accord. This section pertains to questions regarding the appeals process.
Applicable Rules: Marketplace Rule 4800 series.
What does the company have to do in order to appeal a Panel decision?
The Hearing Panel's decision letter will outline the steps necessary to file an appeal. The decision letter will also include a fee payment form. The company must file written notification of its appeal with the NLHRC through the General Counsel's Office of Appeals and Review within 15 calendar days from the date of the Panel's decision. A facsimile request to (301) 978-8471 suffices for this purpose. The company must also submit the $4,000 appeal fee and the payment form within 15 calendar days from the date of the Panel's decision. The fee must be sent in the form of a check to:
Regular Mail
The Nasdaq Stock Market, Inc.
P.O. Box 7777-W0435
Philadelphia, PA 19175-0435 -or- Courier/Overnight
The Nasdaq Stock Market, Inc.
W0435
c/o Mellon Bank, Room 3490
701 Market Street
Philadelphia, PA 19106
The company must also send a photocopy of the check via facsimile and/or mail to the General Counsel's Office of Appeals and Review within 15 calendar days from the date of the Panel's decision. The company may also wire the appeal fee to:
Bank Name: PNC Bank
Bank Address: Washington, DC
ABA Number: 031000053
Account Name: The Nasdaq Stock Market, Inc.
Account Number: 5300401669
SWIFT Number: PNCCUS33
Reference: Hearing Docket Number, Company Name, and Company Symbol
How are the deadlines computed in the delisting letters and in any subsequent dates set by Hearings Department or Appeals?
The company must file written notification of its appeal with the NLHRC through the General Counsel's Office of Appeals and Review within 15 calendar days from the date of the Panel's decision. In accordance with Marketplace Rule 4885, the "clock" does not begin until the day after the letter date and the deadline date is included in the calculation. However, if the deadline date should fall on a Saturday, Sunday, federal holiday or NASDAQ holiday, then the deadline date will be moved to the next business day. In computing all subsequent deadlines, the same principle applies.
What happens when an appeal is requested?
Upon receipt of the notification of appeal and the fee, the request will be placed in the earliest available NLHRC docket. The company will be provided with a confirmation and instructions regarding the appeals process. A copy of the confirmation letter is forwarded to the Listing Qualifications Department requesting that it provide the NLHRC with an update of the company's compliance with the listing standards. This update is also provided to the company, along with a list of those documents comprising the record on review.
In addition, the company may submit any additional information that it wishes the NLHRC to consider on unbound, single-sided 8 ½" x 11" paper by a date stipulated in the confirmation letter. The NHLRC then reviews the Panel's decision on the basis of this information. The NLHRC may also consider the existence and content of public filings and press releases issued by the company and the company's non-compliance with any NASDAQ listing requirements.
What is the NLHRC's level of review when it considers a matter?
The NLHRC conducts a de novo review of the Panel's decision. It considers information available subsequent to the Panel's decision, including new deficiencies and the cure of prior deficiencies. It will also consider all information provided by the company prior to the date stipulated by the NLHRC in its letter confirming the receipt of the request for review. The NLHRC may also consider public filings or press releases of the company.
Is the company entitled to an oral hearing before the NLHRC?
No. According to the procedures for review by the NLHRC, included in the NASDAQ Marketplace Rules, Rule 4840(f) states: "the NLHRC will consider the written record and, at its discretion, hold additional hearings [emphasis added]." It should be noted that the NLHRC has never requested an oral hearing.
How long does the Appeals process take?
Generally, the process takes two to three months from the time the notice of appeal is received from the company to the time that the NLHRC issues its decision. The NLHRC generally meets once a month. However, a decision is not considered final until the NASD Board declines to call the matter for review. Accordingly, this may add another one to two months to the time period prior to when the company can appeal the decision to the SEC. The company must exhausted all of its remedies within NASDAQ before it can file an appeal with the SEC.
Is a Listing Council decision public?
Yes. NASDAQ is required to file the NLHRC decisions with the SEC when they become final. The SEC makes the decisions available to the public. In addition, NASDAQ may publish summaries of decisions in a manner that removes information that would allow identification of the company.
Does an appeal postpone the delisting of the company's securities?
No. A request by the company for review of a Panel decision by the NHLRC will not operate as a stay of the Panel decision. In addition, a "call for review" of a Panel decision by the NLHRC does not operate as a stay of the Panel decision, unless the call for review specifies to the contrary. In some circumstances, the NHLRC may, on its own initiative, determine to stay the delisting.
What is the "Call for Review" process?
The NLHRC reviews all Panel decisions and any member of the NLHRC may request that the full NHLRC review a Panel decision, regardless of whether the company appeals the decision. The NLHRC must call the decision for review within 45 calendar days of the Panel's decision. A call for review is solely at the NLHRC's discretion. Once the NLHRC calls the decision for review, the process is similar to the appeals process. The NLHRC's call for review determination is made without regard to whether the company appeals the Panel decision. However, if the NHLRC subsequently withdraws its call for review, the NLHRC will no longer consider the matter unless the company has filed an appeal within the requisite time period.
