On Friday the NYSE announced that it is temporarily lowering the delisting threshold under Section 802.01B of the Listed Company Manual. This rule ordinarily requires the prompt delisting of any company, including REITs and investment companies, with an average global market cap of less than $25 million for a consecutive 30 day period. Under the new rule, the market cap limit will be reduced to $15 million. This lower global market cap threshold will remain in place until April 22, 2009.
In announcing the new rule, the NYSE stated that, “The Exchange has chosen to temporarily lower this listing standard rather than to impose a complete moratorium on application of the standard because it continues to believe that, even at this time, companies whose market capitalization deteriorates to a level below $15 million are not suitable for continued listing on the Exchange.”
The rule change has not yet been published by the SEC. However, the SEC is expected to waive the 30-day operative delay, making the new threshold effective Friday, January 23, 2009.
This action is similar to the action taken by the NASDAQ taken in mid-October and extended in late December. The NASDAQ suspended their rule requiring a minimum $1 bid price entirely. This rule remains in effect until April 20, 2009.