NYSE Proposes Similar Rules to the Newly Amended Nasdaq Rules
On October 10, 2024, the SEC announced proposed rule changes submitted by the New York Stock Exchange (the “NYSE”) earlier in September, one of which is like the newly amended Nasdaq-rule as discussed above, similarly targeting companies that effect reverse stock splits.
Under current listing standards, if a NYSE-listed company fails to comply with the NYSE minimum-price criteria over a consecutive 30 trading-day period, it is subject to delisting, provided that the NYSE-listed company has six months to cure its noncompliance “if on the last trading day of any calendar month during the cure period the company has a closing share price of at least US$1.00 and an average closing share price of at least US$1.00 over the 30 trading-day period ending on the last trading day of that month.”²
Under NYSE’s proposed amendment,³ if a listed company fails to comply with the minimum closing price and either (a) effected a reverse stock split over the prior one-year period (regardless of the ratio) or (b) effected a reverse stock splits over the prior two-year period with a cumulative ratio of 200 shares or more to one, then the listed company would not be eligible for any compliance period and would be immediately delisted.
Due to these implications, both Nasdaq- and NYSE-listed companies should take pre-cautionary measures to manage these delisting risks.
Footnotes
[1] See Securities Exchange Act Release No. 34-101271 (Oct. 7, 2024), 89 FR 82652 (Aug. 6, 2024) (SR-NASDAQ-2024-045).
[2] See Section 802.01C of the NYSE Listed Company Manual
[3] See Securities Exchange Act Release No. 34-101306 (Oct. 10, 2024), 89 FR 83738 (Sept. 30, 2024) (SR-NYSE-2024-48).
