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Business Conduct Codes

Business Conduct Codes

Business Conduct Codes for New York Stock Exchange and NASDAQ Listed Companies

Companies listed on the New York Stock Exchange and NASDAQ are required by New York Stock Exchange Rule 303A.10 and NASDAQ Rule 4350(n) to implement and make public a business conduct and ethics code for the company’s directors, officers, and employees to follow. Any waiver of provisions of the code for directors or officers of the company also must be disclosed to the public.


The business conduct code to be adopted by each listed company on the New York Stock Exchange must include ethical standards and procedures to implement the code and its standards. The following topics must be addressed in the code:


  • What constitutes a conflict of interest by a director, officer, or employee and how such conflicts are to be communicated to the company;
  • How directors, officers, and employees are to pass on any opportunities they have learned about through their corporate position so that the listed company may take advantage of the corporate opportunity;
  • What information is confidential and how such confidential information of the listed company must be handled by its directors, officers, and employees;
  • Principles of fair dealing with those who have business with the listed company;
  • How assets of the listed company should be used and protected;
  • Laws that must be followed by directors, officers, and employees of the listed company and how such laws must be complied with properly; and
  • Procedures for making known any illegal or unethical behavior within the listed company without fear of retaliation.


Public notice


In order to disseminate the listed company’s business conduct code to the public, the company’s Internet site must include a full copy of the code. Also, the company’s annual report on Securities and Exchange Commission Form 10-K must alert the public to the fact that the code is available on the Internet, and full information on the business code must be made available to any shareholder.

NASDAQ Rule 4350(n) similarly requires adoption of a code of ethics by any company listed on NASDAQ. The code of ethics for NASDAQ companies must include provisions for handling conflicts of interest, must require full disclosure of legally-required information on the company, and must provide for compliance with laws applicable to the listed company’s business.

The NASDAQ rule also requires that listed company employees who report violations within the company of the company’s code of ethics must be protected from retaliation. Any waiver from the provisions of the listed company’s code of ethics must be made public through filing of Securities and Exchange Commission Form 8-K within five days of the waiver and must include a description of the reasons for the waiver.

Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.

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