The SEC has signed off on a Nasdaq proposal to rescind rules aimed at broadening the representation of minorities and women on corporate boards, following a court decision voiding the regulations.
Nasdaq Inc. has until Feb. 4 to delete the regulations from its rulebook, as the stock exchange operator requested earlier this month, the Securities and Exchange Commission said in a Jan. 24 order. Feb. 4 is the effective date of a US Court of Appeals for the Fifth Circuit mandate nullifying the rules.
The regulations, which the SEC approved in 2021, directed thousands of Nasdaq-listed companies to have diverse boards or explain why they don’t. Nasdaq needed the agency’s support again to formally pull them.
Under SEC rules, Nasdaq would have had to wait until after Feb. 4 to implement its plan. But the commission waived the delay because of the court mandate, the agency said.
“The Commission may designate a shorter time if such action is consistent with protection of investors and the public interest,” the SEC said in its order.
A Nasdaq representative didn’t immediately respond to a request for comment.
The requested change “merely updates Nasdaq’s rulebook to reflect the court’s decision,” the company told the SEC on Jan. 16.
The Fifth Circuit tossed the board diversity regulations in December, arguing the SEC lacked the power to approve the rules. The ruling came a month before President Donald Trump took office in January, rolling out a crackdown on diversity, equity, and inclusion programs in the federal government and private sector.
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