As discussed in the August 31, 2020 edition of the Corporate & Financial Weekly Digest, on August 26, the Securities and Exchange Commission (SEC) 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 Stays Implementation of New NYSE 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

Recently, the Securities and Exchange Commission issued a release (the Release) approving, with immediate effectiveness, the New York Stock Exchange’s (NYSE) proposal to extend through September 30 the NYSE’s temporary and partial waivers from the requirement that NYSE-listed companies obtain stockholder approval in connection with certain related party and 20 percent equity issuances (the Waiver).
Continue Reading SEC Approves Extension of Temporary NYSE Waiver of Stockholder Approval Rules

On June 17, the New York Stock Exchange (NYSE) filed with the Securities and Exchange Commission a series of proposed rule changes (Rule Changes) that aim to support the partial return of Designated Market Makers (DMMs) to NYSE’s New York trading floor. For a temporary period that begins on June 17, 2020, and ends on the earlier of a full reopening of the New York trading floor facilities to DMMs or after the NYSE closes on June 30, 2020 (Covered Period), the following Rule Changes would apply:
Continue Reading NYSE Proposes Rule Changes Regarding the Partial Re-Opening of the Trading Floor

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

On April 6, the Securities and Exchange Commission issued a release (the Release) announcing that the New York Stock Exchange (NYSE) had issued temporary and partial waivers from the requirement that NYSE-listed companies obtain stockholder approval in connection with certain related party and 20 percent equity issuances (the Waiver). In the Release, the NYSE acknowledged the “unprecedented disruption” caused by the COVID-19 pandemic and the great likelihood that many listed companies will “have urgent liquidity needs in the coming months due to lost revenues and maturing debt obligations,” which may mean that listed companies will “need to access additional capital that may not be available in the public equity or credit markets.” The Waiver provides NYSE-listed issuers with greater flexibility to engage in capital raising transactions, such as private investment in public equity (PIPE) transactions and registered direct offerings, that may otherwise be constrained by the NYSE’s existing stockholder approval rules. The Waiver remains in effect through June 30, 2020.
Continue Reading SEC Approves Temporary NYSE Waiver of Stockholder Approval Rules to Facilitate Capital Raising in the Wake of 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 July 26, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice requesting comment on a proposal to the NASD Rule 1010 Series (collectively, the “Membership Application Program” rules). The Membership Application Program rules govern how FINRA’s Department of Member Regulation (the Department) reviews new membership applications and continuing membership applications (CMAs). An applicant must be able to show its ability to comply with the standards set forth in the Membership Allocation Program rules, and, to ensure that such applicant can comply with the rules, the Department considers an applicant’s financial, operational and compliance systems.
Continue Reading FINRA Seeks Comment on Proposed Amendments to the Membership Application Program Rules

On July 12, the New York Stock Exchange (NYSE) proposed an amendment to NYSE Rule 2, which requires that an NYSE member also be a member of the Financial Industry Regulatory Authority (FINRA) or another registered securities exchange. As a part of the consolidation of the National Association of Securities Dealers and NYSE Regulation to form FINRA, NYSE Rule 2 was revised in 2007 to require each NYSE member organization to become a FINRA member. Eventually, NYSE amended the rule so that NYSE members could be members of FINRA or a registered securities exchange.
Continue Reading NYSE Proposes to Amend Rule Requiring Registered Broker-Dealers to be Members of FINRA or Another Exchange

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