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Reverse Stock Split

Rule 144 – A Deep Dive – Part 5 – Limitations On Amount Of Securities Sold

In this fifth installment of my series on Rule 144, I will continue discussing the various conditions for the use of the Rule, covering limitations on the amount of securities that may be sold.  In the first installment, I provided a high-level review of Rule 144 – see HERE ; in the second, I discussed definitions including the impactful “affiliate” definition – see HERE; in the third I reviewed the current public information requirements – see HERE; and in the fourth I covered holding periods – see HERE.

Conditions for Use of Rule 144

                General

Rule 144 provides certain conditions that must be met by selling affiliates and selling non-affiliates which conditions vary depending on whether the Issuer of the securities is a reporting or non-reporting company and whether the Issuer is or ever has been a shell company.  The high-level Rule 144 requirements for non-affiliates include: (i) holding period; (ii) availability of current public information; and

NYSE Amends Listing Standards For Foreign Private Issuers And Listing Fees For All Issuers

In April the NYSE amended its listing fees for all issuers and in May 2025, amended the standards for foreign private issuers to meet the exchange’s minimum stockholder distribution requirements.  The new rules were enacted a few weeks before the SEC published a concept release and request for comment related to foreign private issuers in general (which will be the subject of an upcoming blog).

NYSE Listed Company Rule 902.03 – Fees for Listed Equity Securities

Effective April 1, 2025, the NYSE amended Listed Company Rule 902.03 to reduce the listed company fees for the first five years following an initial listing.  The amended rule provides that a company that lists on the exchange will only be charged the initial listing fee plus an annual fee calculated on an adjusted basis for any subsequent issuance or other corporate action (“Limited Fee Exemption Period”).

During the Limited Fee Exemption Period, an eligible company will not be charged any other listing fees

NASDAQ Finalizes Amendments To Accelerate Delisting Process

On January 17, 2025 the SEC approved Nasdaq’s rule change to accelerate the delisting process for companies that fail to regain compliance with the minimum bid price requirements following a second compliance period and for securities that have had a reverse stock split over the prior one-year period.  The final rule was passed as last submitted by Nasdaq, though in between the SEC required substantial additional analysis delaying the process on 3 occassions.

These rule changes follow other recent rule changes meant to reduce the number of ultra micro-cap companies trading on the national exchange and tighten up compliance for those that do meet the standards.  In October 2024, Nasdaq amended Rule 5810(c)(3)(A) to allow for an accelerated delisting process where a listed company uses a reverse split to regain compliance with the bid price requirement for continued listing, but that as a result of the reverse split, the company falls below other listing standards, such as the minimum

NYSE Amends Listing Standards Related To Reverse Splits To Meet Minimum Price

On January 15, 2025, the SEC approved amendments to NYSE Listed Company Manual Rule 802.01C to allow for an accelerated delisting process where a listed company uses a reverse split to regain compliance with the bid price requirement for continued listing, but that as a result of the reverse split, the company falls below other listing standards, such as the minimum number of round lot holders, or minimum number of shares in the publicly held float.  In October 2024, the SEC approved a similar rule change for Nasdaq – see HERE.

The SEC also approved amendments to Rule 802.01C such that: (i) if a listed company has effected a reverse stock split over the prior one-year period; or (ii) has effected one or more reverse stock splits over the prior two year period with a cumulative ratio of 200:1 or more, the company shall not be eligible for any compliance period and will face immediate suspension and delisting.

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Laura Anthony Esq

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