On February 20, 2013, The NASDAQ Stock Market LLC filed a proposed rule change with the SEC.  The rule proposes to require that listed companies establish and maintain internal audit function to provide management and the audit committee with ongoing assessments of the Company’s risk management processes and system of internal control.

The purpose of the rule is to ensure that listed companies have a mechanism in place to regularly review and assess their system of internal control and to identify any weakness and develop appropriate remedial measures.  The rule is intended to make sure that the listed company’s management and audit committee are provided with ongoing information about risk management processes and the system of internal control.  This rule should also assist listed companies’ efforts to comply with their obligations under federal securities law, including but not limited to Rules 13a-15 and 15d-15 under the Act, which require most companies to maintain and to evaluate, with the participation of their principal executive and principal financial officers, or persons performing similar functions, the effectiveness of the internal control over financial reporting.

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

The Commission published this notice on March 4, 2013, to solicit comments on the proposed rule change from interested persons.  Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission shall: (a) by order approve or disapprove such proposed rule change, or (b) institute proceedings to determine whether the proposed rule change should be disapproved.