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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 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

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