NYSE Follows Nasdaq in Providing Temporary Relief from Price-Based Continued Listing Standards for Companies Affected by COVID-19 Crisis
April 23, 2020
By Serge V. Pavluk
Earlier this week, we issued a Legal Alert on a Nasdaq rule change that offered temporary relief to the Nasdaq-listed companies to the extent their stock prices and market values drop below the required minimums under the Nasdaq continued listing standards.
On Tuesday this week, the Securities and Exchange Commission (SEC) approved, effective immediately, New York Stock Exchange’s (NYSE) proposed rule change to offer temporary relief to the NYSE-listed companies to the extent their stock price and global market cap/stockholders’ equity drop below the required minimums under the NYSE continued listing standards.
In its proposed rule change filing, NYSE stated that, because of unprecedented market-wide declines as a consequence of the ongoing COVID-19 pandemic, NYSE has experienced an unusually high number, as compared to historical levels, of listed companies that have been or may soon be designated as below compliance due having both stockholders’ equity of less than $50 million and an average global market capitalization over a consecutive 30 trading-day period of less than $50 million or due to average closing price of their stock having fallen below $1.00 over a consecutive 30 trading-day period.
NYSE provided a longer period for the listed companies to regain compliance with their $50 million market capitalization/stockholders’ equity and $1.00 price continued listing requirements by tolling the compliance periods through and including June 30, 2020.
Accordingly, the period from April 21, 2020 through June 30, 2020 will not be counted toward the maximum applicable compliance plan period of 18 months with respect to the $50 million standard or six months with respect to the dollar price standard. Such applicable compliance plan periods for companies newly identified as below compliance with these listing standards during the tolling period would be calculated as beginning on July 1, 2020.
NYSE will continue to monitor and notify the listed companies that fall out of compliance. The companies notified of noncompliance during the tolling period would have to meet the press release and Form 8-K non-compliance disclosure requirements under the applicable rules. Further, NYSE would continue to attach a “.BC” indicator to such companies’ tickers and would continue to identify them as below compliance on the NYSE website during the tolling period.