Listings Standards Expected To Rise At NYSE, Nasdaq
14 Luglio 2009 - 6:18PM
Dow Jones News
The Securities and Exchange Commission is expected to tighten
U.S. stock market listing rules beginning in August, after relaxing
requirements in the wake of the global financial crisis.
The SEC had lowered the minimum price threshold for companies to
remain on the New York Stock Exchange in February, and the Nasdaq
Stock Market in October.
Officials at NYSE Euronext (NYX) and Nasdaq OMX Group Inc.
(NDAQ) don't plan to request an extension of the relief beyond its
planned expiry on July 31, as most of the troubled listees have
seen their stock prices resume trade above the key $1
threshold.
"There is much less of a reason for us to push for an extension
as there was when we originally requested the moratorium," said
Scott Cutler, head of listings for the Americas at NYSE Euronext,
in an interview.
Representatives of the SEC declined comment.
Both NYSE Euronext and Nasdaq OMX have rules requiring listed
companies to maintain a minimum price of $1 per share.
If a stock trades below $1 for 30 consecutive business days,
companies usually are given 180 days to fix the issue or face
delisting.
Nasdaq OMX suspended its minimum bid price requirements last
October with the approval of U.S. regulators, at a time when the
exchange's delistings were double the previous year's level.
NYSE Euronext asked the SEC for permission to relax its own
dollar standard for U.S. stocks in late February, a month after the
exchange lowered its market value standard to $15 million from $25
million.
The moves offered relief to companies that saw their share
prices pummeled in a market slide that eventually wiped out about
half the value of the Dow Jones Industrial Average.
Temporarily suspending listings standards also helped ease
pressure on the exchanges, for which listings represent a source of
revenue.
In March, more than 100 NYSE-listed stocks were trading under a
dollar or approaching that level, Cutler said, but since then about
three-quarters of those names have recovered and climbed back above
the threshold.
Nasdaq OMX declined to provide figures detailing the number of
Nasdaq-listed companies that have resumed trade above $1, but
spokeswoman Silvia Davi said that "quite a few companies have
benefited" from the relaxed standards.
Some names have gone the other way. For the year through July
10, 72 companies have been delisted from Nasdaq OMX markets,
compared last year's total of 85.
NYSE Euronext reported 24 companies delisted from its U.S.
markets so far this year, about half the exchange's 2008 total,
which was the highest in five years.
Cutler said that temporarily easing standards for remaining
listed on the NYSE had the "rightful effect" in boosting investors'
confidence that the NYSE-listed stocks they owned would not wind up
trading on the pink sheets.
"At the time when [we] put in place the moratorium, there was
not a clear understanding of the duration of the crisis," said
Cutler. "In hindsight today, the market itself corrected a lot of
these problems."
NYSE Euronext shares were down 1.5% in midmorning trade at
$25.54, with Nasdaq OMX down 1.2% at $19.61.
-By Jacob Bunge, Dow Jones Newswires; 312-750-4117;
jacob.bunge@dowjones.com