Nasdaq Moves to Erase Board Diversity Rules After Court Loss

Nasdaq is seeking to formally withdraw rules meant to boost the number of women and minorities on company boards, after a federal appeals court struck them down last year.

The stock exchange operator intends to scrub the regulations from its rulebook for listed companies by Feb. 4, according to a Thursday filing with the Securities and Exchange Commission. A US Court of Appeals for the Fifth Circuit mandate voiding the rules will take effect that day, Nasdaq Inc. said.

The rules required thousands of listed companies to have diverse boards or explain why they don’t. The SEC must back Nasdaq’s plans in order for the exchange operator to officially remove the regulations. The Fifth Circuit in December ruled that the SEC lacked the authority for its 2021 approval of the board diversity rules.

“The proposed rule change merely updates Nasdaq’s rulebook to reflect the court’s decision, which takes effect without regard to this rule filing,” the exchange operator said in its paperwork.

• An SEC spokesperson declined to comment.
• A Nasdaq representative said in December the company didn’t plan to challenge the Fifth Circuit decision.
• The Fifth Circuit voted 9-8 to scrap the rules, siding with conservative groups that argued the SEC overstepped its authority by approving the regulations.