Wall Stays Up a Bit Longer: The SEC Stays Its Approval of the NYSE’s Primary Direct Listing Rules
September 2, 2020
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On August 31, 2020, the SEC notified the NYSE that it was staying its August 26, 2020 approval of the NYSE’s rules that would permit primary direct listings.1 The Wall Street Journal reports that the SEC issued the stay after the Council of Institutional Investors filed a notice that it would petition for a review of the SEC’s approval of the rules by the SEC’s five commissioners. The SEC’s release initially approving the rules cited the Council of Institutional Investors as one of several commenters that expressed concerns regarding the rules.
The SEC’s Rules of Practice do not specify a timetable for completing the review process, which is a prerequisite to seeking judicial review of the SEC’s approval of the rules.2
1 As discussed in our August 28, 2020 edition of Momentum Minutes, a primary direct listing is a type of direct listing which enables issuers to raise capital in connection with the listing. Currently, only existing stockholders (i.e., employees or private investors) are able to sell stock in a direct listing.
2 SEC Rules of Practice and Rules on Fair Fund and Disgorgement Plans, 17 CFR 201.430(c).
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