The New York Stock Exchange and Nasdaq continue to provide relief to companies – including brokers and dealers – that are dealing with a wide range of challenges from the COVID-19 pandemic. Their recent actions are summarized below:
- Compliance with Listing Standards: The NYSE has filed with, and the SEC has granted immediate effectiveness to, a rule change giving listed companies relief from compliance with NYSE listing requirements on the price and market value of publicly held shares. Like a similar Nasdaq rule change, the relief is in the form of tolling the compliance period through June 30, 2020. Despite the rule change, the NYSE will continue to identify noncomplying companies, which will continue to be required to comply with press release and 8-K standards.
Interestingly, despite providing for the relief referred to above, Nasdaq has also proposed, and the SEC has approved, a rule enabling the delisting of securities with a closing bid price below $0.10 for 10 consecutive trading days or securities that have undergone reverse splits with a cumulative ratio of 1:250 during the preceding two years. As of May 18, 2020, the SEC has delayed the effectiveness of this rule change until September 2020. See Nasdaq Retreats on Delisting Rule Change.
- Proxy delivery deadlines: The SEC has also granted immediate effectiveness to a rule proposal extending the deadline by which NYSE member organizations must send physical copies of proxy materials to beneficial owners. While member organizations are typically brokers and dealers rather than issuers, the rule is likely to help companies achieve quorums at their annual meetings, thereby reducing the likelihood of adjournments or postponements.
If you have any questions, please contact Gunster securities law and corporate governance practice leader Bob Lamm.
