Tag: NYSE minimum price criteria
SEC approves NYSE proposal to limit the use of reverse stock splits to regain compliance with price criteria
In October last year, the NYSE proposed, like Nasdaq, to take on the challenge of repeated reverse stock splits by limiting the circumstances under which a listed company could use a reverse stock split to regain compliance with the minimum price criteria. The NYSE subsequently filed a couple of amendments to the proposal, and, while comments are still being solicited, the SEC has now approved the proposed rule change, as modified by Amendment No. 2, on an accelerated basis.
NYSE proposes to limit the use of reverse stock splits to regain price compliance
Not to be outdone by Nasdaq, the NYSE is now also proposing to take on the challenge of repeated reverse stock splits. More specifically, the NYSE proposes to limit the circumstances under which a listed company may use a reverse stock split to regain compliance with the minimum price criteria. Of course, Nasdaq has recently proposed or adopted similar rule changes limiting the use of reverse stock splits to satisfy the minimum bid price requirement. (See the SideBar below.) Although the NYSE had said in May that it had not experienced the same increased volume of reverse stock splits as Nasdaq, the exchanges are apparently seeking some consistency in their approaches to these issues.
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