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NASDAQ Proposed Rule Change


The NASDAQ Stock Market LLC (Nasdaq) recently proposed a new rule that would require listed companies to establish and maintain an internal audit function.

The purpose of the rule is to protect investors and the public interest. The internal audit function serves to ensure that management and the audit committee receive information about their company's risk management processes and internal control system. Companies may choose to outsource this function to a third party service provider, or handle it internally with its own independent audit staff.

A company listed on the NASDAQ on or before June 30, 2013, will be required to establish an internal audit function by no later than December 31, 2013. A company listed after June 30, 2013, must establish the function prior to listing.

Company Preparation

Nasdaq-listed companies should prepare for this rule by determining:

  1. If the internal audit function can be created in-house, or if a third party vendor should be used
  2. If the audit committee is overseeing the internal audit function, or has it been delegated to another board committee
  3. The scope of risks and internal controls to be included
  4. The time and resources needed to comply with the rule 

Please contact DLA if you or your Company has any questions on this rule, or needs assistance in assessing or establishing your internal audit function.

Proposal Information:

The SEC is currently seeking comments on the proposal. A copy of the proposal is available on the SEC's website To submit comments electronically, use the Commission's Internet comment form (; or send an e-mail to Comments are also accepted by regular mail (in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549). All comments must reference file number SR-NASDAQ-2013-032. Comments will be accepted up until March 29, 2013.


04/19/2013 - 12:10



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