Audit Committees – NYSE American
Like Nasdaq, I’ve written several times about the NYSE American listing requirements including the general listing requirements (see HERE) and annual compliance guidelines (see HERE). As an aside, although the Nasdaq recently enacted significant changes to its initial listing standards, the NYSE American has not done the same and no such changes are currently anticipated. I suspect that the NYSE American will see a large uptick in new company applicants as a result.
I recently drilled down on audit committee requirements and director independence standards for Nasdaq and in this and the next blog, I will do the same for the NYSE American. As required by SEC Rule 10A-3, all exchange listed companies are required to have an audit committee consisting of independent directors. NYSE American Company Guide Rule 803 delineates the requirements independent directors and audit committees. Rule 803 complies with SEC Rule 10A-3 related to audit committees for companies listed on a national securities exchange.
NYSE American Board Independence Standards
NYSE American Company Guide Rule 803 delineates the requirements independent directors and audit committees. NYSE American Company Guide Rule 802 requires that a majority of the board of directors of a listed company be “independent.” Rule 803 requires that all members of the audit committee be independent and defines independence and Rules 804 and 805 require that all directors on the nominating and compensation committees, if a company has such committees, be independent.
Under NYSE American Company Guide Rule 803, an “independent director” means a person other than an executive officer or employee of a company. The board of directors must make an affirmative finding that a director does not have a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director for that director to qualify as independent. However, the NYSE American rules specify certain relationships that would disqualify a person from being considered independent. Stock ownership is not on the
