Nasdaq plans to reinstate minimum bid price and market value requirements, which were suspended in the wake of September 11.

While Nasdaq will maintain the existing grace periods for National Market companies to comply, it proposes to modify the grace period for minimum bid price on the SmallCap market.

The proposal was recommended by the Nasdaq Listing and Hearing Review Council, and approved by the Nasdaq and NASD Boards. It requires the approval of the Securities and Exchange Commission.

Nasdaq’s emergency moratorium on the enforcement of the minimum bid price and market value of public float requirements is scheduled to expire on January 2, 2002.

This temporary relief was granted in response to extraordinary market conditions following September 11, to allow companies to focus on running their businesses, rather than on meeting these two listing requirements.

After careful examination, Nasdaq believes that minimum bid price and market value of public float continue to be useful requirements. Additionally, Nasdaq believes that the current 90-day grace period for Nasdaq National Market companies to regain compliance with the market value of public float and minimum bid price requirements are appropriate and commensurate with the stature of that market.

Helen Scott, co-chair of the Nasdaq Listing and Hearing Review Council, commented: “If a company’s stock price goes under a dollar, the company knows best what kinds of transactions will enhance its business and financial stability, many of which may take longer than 90 days to complete. Dropping a stock from the Nasdaq National Market directly onto a less transparent, non-Nasdaq market, hurts companies and their stockholders, and may trigger defaults in debt covenants or preferred stock. This proposal allows a company to continue to trade on the SmallCap market for a longer period, so that it can secure and close on new financing or execute another turnaround plan.”