Statement Summary
The SEC has approved an amendment proposed by the New York Stock Exchange (NYSE) to its Listed Company Manual, affecting Sections 802.02 and 802.03. This amendment mandates that listed companies deemed non-compliant with continued listing standards must pay all outstanding fees to the NYSE before submitting compliance plans. Failure to do so will result in immediate suspension and delisting procedures. The proposal aims to streamline the compliance review process, as evaluating plans is resource-intensive for the Exchange. The NYSE intends to disclose any unpaid fees to companies upon identification of non-compliance and during periodic reviews, thereby enhancing transparency in the delisting process for companies that owe fees. The SEC supports these changes, highlighting that they serve investor protection and improve the NYSE’s resource allocation.
Original Statement
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103088; File No. SR-NYSE-2024-44]
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change,
as Modified by Amendment No. 1, to Amend Sections 802.02 and 802.03 of the NYSE Listed Company Manual to Provide that the Exchange Will Not Review a Compliance Plan
Submitted by a Listed Company that is Below Compliance with a Continued Listing Standard if the Company Owes Any Unpaid Fees to the Exchange and Will Instead
Commence Suspension and Delisting Procedures if Such Fees are Not Paid in Full
May 20, 2025.
Introduction
On September 27, 2024, the NYSE filed with the SEC a proposed rule change pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, to amend Sections 802.02 and 802.03 of the NYSE Listed Company Manual. The amendment states that the Exchange will not review a compliance plan submitted by a company that is below compliance with a continued listing standard unless the company has paid all outstanding listing or annual fees. If the fees are not paid in full by the plan submission deadline, suspension and delisting procedures will commence.
Description of the Proposed Rule Change
The amendment adds provisions about how the Exchange will handle compliance plans. Key aspects include:
- Companies must submit a plan advising the Exchange of actions taken to regain compliance within 18 months.
- The Exchange will commence suspension and delisting procedures for any company that has unpaid fees.
- Periodically, companies will be notified of any outstanding fees due.
The proposal includes a structured approach to ensure that companies submitting plans for compliance are also compliant in fee payments, thus improving resource allocation and transparency by the Exchange.
Discussion and Commission Findings
The SEC finds the proposed rule change consistent with the requirements of the Exchange Act, particularly focusing on investor protection and maintaining fair and orderly markets. The Commission recognizes that the Exchange’s process for reviewing plans is resource-intensive and thus supports the proposal to ensure companies are financially responsible before resuming compliance review processes.
Conclusion
The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis, concluding that the proposal is consistent with the goals of the Exchange Act. This decision aims to maintain a rigorous yet fair compliance environment in line with investor protections.
