What is the effect of a regulatory trading halt?
In certain cases, NASDAQ may determine that it is appropriate to halt trading in a security. This may occur, for example, when a company is unable to file its periodic reports, resulting in a lack of publicly available information about the company, due to circumstances that raise significant public interest concerns. The length of a trading halt can vary and there are no prescribed rules that limit how long trading may be halted. NASDAQ will only resume trading when the company has fully responded to NASDAQ’s information requests and NASDAQ determines that sufficient information is publicly available. The imposition of a regulatory trading halt by NASDAQ has the effect of precluding all trading in the affected security. As such, trading cannot occur on other exchanges or in the over-the-counter market. While NASDAQ recognizes that a trading halt can disadvantage existing investors, NASDAQ’s primary regulatory responsibility is to prospective investors.
