On 25 November 2024, the United States Securities and Exchange Commission announced the extension of the review period for a proposed rule change submitted by the New York Stock Exchange (NYSE). The proposal seeks to amend Section 802.01C of the NYSE Listed Company Manual, which governs price criteria for capital or common stock, to impose new restrictions on reverse stock splits in specific situations.
The NYSE’s proposed amendment, initially filed on 30 September 2024 under Section 19(b)(1) of the United States Securities Exchange Act of 1934, aims to address two issues. First, companies that fall below the prescribed price criteria and use reverse stock splits to regain compliance would lose eligibility for a compliance period in certain cases. Second, companies would be prohibited from implementing reverse stock splits if doing so would cause them to fall below the continued listing requirements. This proposal was published for public comment in the Federal Register on 17 October 2024.
Under Section 19(b)(2) of the United States Securities Exchange Act, the United States SEC is required to act on such proposals within 45 days of publication, which in this case is 1 December 2024. However, the United States SEC has opted to extend this timeframe to allow for more thorough consideration of the rule and the comments received during the public consultation period. The new deadline for the United States SEC’s decision in the filed amendment is now set for 15 January 2025. By this date, the United States SEC will decide whether to approve, disapprove, or further evaluate the proposed rule change.
(Source: https://www.sec.gov/files/rules/sro/nyse/2024/34-101746.pdf)
