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Earlier this month, the Securities and Exchange Commission approved amendments (the Amendments) to New York Stock Exchange (NYSE) rules that require listed companies to obtain shareholder approval of certain private placements and equity issuances to “related parties,” as well as requirements related to transactions between a listed company and certain related parties. In particular, the Amendments, which were initially proposed in December 2020 and subsequently modified, modified Sections 312.03, 312.04 and 314.00 of the NYSE Listed Company Manual. According to NYSE, the Amendments to Sections 312.03 and 312.04 are intended to more closely align shareholder approval requirements applicable to NYSE listed companies with comparable requirements for companies listed on Nasdaq or NYSE American and, in doing so, provide greater flexibility to NYSE-listed companies seeking to raise capital. The flexibility provided by such Amendments tracks, in various respects, the flexibility provided through temporary rules adopted by NYSE in response to the COVID-19 pandemic, which are being terminated by the Amendments. The amendments to Section 314.00 clarify the role of the audit committee in approving related party transactions, and expand the scope of transactions to which related party transaction rules apply.
Continue Reading SEC Approves Amendments to NYSE Shareholder Approval Rules for Certain Equity Issuances and Requirements for Related Party Transactions

On March 31, the staff of the Division of Corporation Finance (the Staff) of the Securities and Exchange Commission issued a staff statement (the Staff Statement) relating to accounting, financial reporting and governance issues for private companies to consider before engaging in a business combination with a special purpose acquisition company (SPAC).
Continue Reading SEC Corp Fin Staff Issues Statement on SPAC Transactions

On December 22, 2020, the Securities and Exchange Commission approved the New York Stock Exchange’s proposed new direct listing rules to allow companies engaging in a direct listing to raise capital directly through a primary sale of shares, in addition to, or instead of, only facilitating sales of shares by existing shareholders, as previously permitted.
Continue Reading SEC Again Approves NYSE’s Direct Listing Rules

On August 26, the Securities and Exchange Commission approved rules proposed by the New York Stock Exchange (NYSE) to allow companies engaging in a direct listing to raise capital directly through the sale of primary shares upon the direct listing, in addition to, or instead of, facilitating sales of shares solely by existing shareholders.
Continue Reading SEC Approves New NYSE Direct Listing Rules

On May 14, the Securities and Exchange Commission announced the adoption and immediate effectiveness of Section 312.03T of the NYSE Listed Company Manual. Recognizing that existing exceptions to the shareholder approval requirements in the NYSE Listed Company Manual are “not helpful in most situations arising from the COVID-19 pandemic,” Section 312.03T provides a temporary exception to shareholder approval requirements applicable to certain issuances of equity securities (or convertible or other securities that may result in the issuance of equity securities) representing 20 percent or more of a New York Stock Exchange (NYSE)-listed company’s common stock or voting power, as well as narrow exceptions from shareholder approval requirements in connection with issuances to a related party or equity compensation. Section 312.03T is scheduled to expire on June 30, 2020.
Continue Reading NYSE Provides Temporary Relief From Shareholder Approval Requirements Due to COVID-19

The Council of Institutional Investors (CII), an investor advocacy association primarily for pension funds and local governments, has put forth a proposal to amend the Delaware General Corporation Law to limit the ability of publicly-traded Delaware corporations to maintain multi-class common stock voting structures (i.e., high-vote/low-vote stock structures).
Continue Reading Institutional Investor Advocacy Group Proposes Limits to Multi-Class Voting by Delaware Companies

On April 3, the Securities and Exchange Commission published a notice to solicit comments on Amendment No. 2 to a proposed rule change filed by the Nasdaq Stock Market LLC, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934. The SEC also approved the proposed rule change, as modified by Amendment No. 2, on an accelerated basis.
Continue Reading Nasdaq Proposes Rule Change to SEC to Assume Operational Responsibility for Certain Investigation and Enforcement Functions Currently Performed by FINRA

The Nasdaq Stock Market LLC (Nasdaq) has filed a proposed change to Nasdaq Rule 4756(c)(2) with the Securities and Exchange Commission. Rule 4756(c)(2) provides that, for each security listed on Nasdaq, the aggregate size of all quotes and orders at the best price to buy and sell will be transmitted for display to the appropriate network processor, unless the aggregate size is less than one round lot.
Continue Reading SEC Proposed Rule Change To Amend Nasdaq Rule 4756(c)(2)

The Nasdaq Stock Market LLC (Nasdaq) has filed with the Securities and Exchange Commission a proposed rule change to modify the current system of credits Nasdaq offers to members that add liquidity in securities that are listed on exchanges other than Nasdaq or the New York Stock Exchange. In particular, Nasdaq is seeking to modify one and eliminate another one of the volume-based credits that it offers for displayed quotes/orders that provide liquidity on Nasdaq in Tape B Securities.
Continue Reading Nasdaq Has Proposed a New Rule Change To Modify Its System of Volume-Based Credits