On June 30, the New York Stock Exchange, LLC proposed to make permanent the current temporary reduction of its global market capitalization continued listing standard from $25 million to $15 million. As amended, Rule 802.01B of the NYSE’s Listed Company Manual would provide that suspension and delisting procedures will be initiated for companies (including limited partnerships and real estate investment trusts) which have an average global market capitalization over a consecutive 30 trading-day period of less than $15 million.
In the NYSE’s submission to the Securities and Exchange Commission, the NYSE cited reduced stock prices as a reason for the permanent rule change, stating that it originally increased its market capitalization continued listing threshold from $15 million to $25 million in 2004, when stocks were priced “far higher” than they are now. The NYSE further asserted that, as a result of its recent experience with a $15 million market capitalization threshold, it has concluded that companies which are in compliance with all other NYSE rules remain “viable enterprises and suitable for auction market trading.”
As previously reported in the January 30 and March 6 editions of Corporate and Financial Weekly Digest, the NYSE temporarily reduced its market capitalization threshold to $15 million effective January 22, 2009, and then extended such reduction through June 30, 2009.
Under the SEC’s rules, a self-regulatory organization’s proposed rule change does not become operative until 30 days after the date of its filing with the SEC. However, the NYSE has requested a waiver of this 30-day delay.
Click here to read the NYSE’s submission to the SEC regarding the proposed permanent rule change.