Notice2026-03016
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Section 703.12(II) of the NYSE Listed Company Manual To Expand the Circumstances Under Which Rights May Be Listed on the NYSE
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 17, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 31 (Tuesday, February 17, 2026)</title>
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[Federal Register Volume 91, Number 31 (Tuesday, February 17, 2026)]
[Notices]
[Pages 7332-7336]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-03016]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104816; File No. SR-NYSE-2026-05]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change Amending Section 703.12(II) of
the NYSE Listed Company Manual To Expand the Circumstances Under Which
Rights May Be Listed on the NYSE
February 11, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 4, 2026, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Section 703.12(II) of the NYSE
Listed Company Manual (``Manual'') to expand the circumstances under
which rights may be listed on the NYSE. The proposed rule change is
available on the Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a> and at the
principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
[[Page 7333]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Section 703.12(II) of the Manual provides for the listing of rights
on the NYSE. For purposes of Section 703.12(II), the term ``rights''
refers to the privilege offered to holders of record of issued equity
securities to subscribe for additional securities of the same class.
Consistent with this definition, rights that have traded on the
Exchange historically have involved a distribution of rights to the
holders of a class of equity securities that is already listed on the
Exchange, and such rights have typically been limited to granting the
recipients the right to subscribe for additional shares of the listed
class of equity securities they already hold.
While it has historically been the case that rights traded on the
Exchange have been granted only to existing shareholders of the issuer,
the Exchange does not believe that there is an investor protection
concern that justifies that limitation. Consequently, the Exchange
proposes to amend Section 703.12(II) to provide that the term
``rights'' will also refer to the privilege offered recipients of such
rights to subscribe for shares of a class of securities of such issuer
that is listed or to be listed on the Exchange, regardless of whether
the recipients of the rights are existing shareholders of record of
such issuer. The Exchange also proposes to amend Section 703.12(II) to
specify that listed rights may be issued to the initial recipient of
such rights either with or without the payment of consideration by such
initial recipients.
Section 703.12(II) currently provides that, in order to be listed
on the Exchange, rights must be issued to purchase or receive a
security that is already listed on the Exchange or that will be listed
on the Exchange concurrent with the rights. The Exchange also proposes
to expand the circumstances in which a right may be listed to permit
the listing of a right where the security into which such right is
exercisable will be listed on the Exchange upon exercise of the rights
and such exercise is pursuant to a registration statement filed under
the Securities Act of 1933 (a ``Securities Act Registration
Statement'') that has been declared effective by the SEC prior to or
simultaneous with the listing of such rights (such rights will be
defined in the proposed amended rule as ``Prospective Listing
Rights''). The proposed provisions relating to Prospective Listing
Rights mean that some listed rights may list and trade on the Exchange
prior to the listing and trading of the securities for which such
rights are exercisable. The Exchange believes that this amendment will
give issuers greater flexibility in structuring a rights offering as a
capital raising tool. Specifically, the Exchange believes that the
requirement that there be an effective Securities Act Registration
Statement in relation to the exercise of the Prospective Listing Rights
prior to or simultaneous to the listing of the Prospective Listing
Rights would provide a significant investor protection as it would
ensure that investors trading or exercising the Prospective Listing
Rights would have access to the appropriate level of disclosure to
enable them to make informed investment decisions. The Exchange notes
that the issuer of the Prospective Listing rights will be required by
law to update this Securities Act Registration Statement to reflect any
material changes in the information required to be included therein
that arise between the time of effectiveness of the Securities Act
Registration Statement and the exercise of the Prospective Listing
Rights, thereby ensuring that investors trading the Prospective Listing
Rights on the Exchange will have access to current information about
the issuer on a continuous basis.
Any security underlying a Prospective Listing Right will be
required to meet applicable initial listing standards set forth in
Section 102.00 or Section 103.00. Prospective Listing Rights would only
be eligible for initial listing if, at the time of initial listing,
such Prospective Listing Rights meet the following initial listing
requirements: (i) at least 1,000,000 rights issued; (ii) an opening
trading price of at least $1.00 per Prospective Listing Right; (iii)
market value of publicly-held securities of at least $10 million, and
(iv) at least 400 public holders of round lots.\3\ The Exchange notes
that the proposed distribution requirements are identical to those
required for securities to be listed under the ``equity'' standards
(i.e., for trading on the NYSE's trading floor) under Section 703.19
(``Other Securities'') of the Manual. The required $10 million in
market value of publicly-held securities proposed initial listing
requirement for Prospective Listing Rights exceeds the $4 million total
market value for securities listed under the ``equity'' standards for
securities listed under Section 703.19.
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\3\ For purposes of Section 703.12(II), ``Public holders''
excludes holders that are directors, officers, or their immediate
families and holders of other concentrated holdings of 10 percent or
more of the total outstanding shares.
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As proposed, any funds paid upon exercise of Prospective Listing
Rights by the holders thereof must be held in a trust account
controlled by an independent custodian until consummation of the
transaction in connection with which such Prospective Listing Rights
are being exercised. The Prospective Listing Rights must provide by
their terms that the funds held in trust will promptly be returned to
the holders who have submitted the required exercise price in the event
that the transaction agreement is terminated or is not consummated
within one year of the initial listing of such Prospective Listing
Rights.
As proposed, any series of Prospective Listing Rights must
terminate by its terms if the transaction with respect to which the
exercise of the Prospective Listing Rights is being solicited is not
consummated within one year of the commencement of trading of such
Prospective Listing Rights on the Exchange.
If it is determined that the security for which the Prospective
Listing Rights are exercisable will not be listed on the Exchange
(which may occur for a variety of reasons, including because the
Exchange determines that the underlying securities are no longer
eligible for listing or the issuer chooses to terminate the Prospective
Listing Rights because the transaction that they were intended to fund
has been terminated), the Exchange will promptly initiate suspension
and delisting procedures with respect to such Prospective Listing
Rights.
In addition, if the market value of publicly-held shares of a
series of Prospective Listing Rights at any time is less than
$4,000,000 or the trading price per Prospective Listing Right falls
below $0.10, the Exchange will promptly initiate suspension and
delisting procedures with respect to such Prospective Listing Rights.
The Exchange notes that this $4,000,000 continued listing requirement
is comparable to the $4,000,000 initial market value requirement for
securities to be listed under the ``equity'' standards under Section
703.19 (``Other Securities'') of the Manual. If Prospective Listing
Rights remain outstanding at the time of the initial listing on the
Exchange of the securities into which such Prospective Listing Rights
are exercisable, the Prospective Listing Rights must at such time meet
all of the initial listing requirements applicable to the listing of
rights other than Prospective Listing Rights. Any Prospective Listing
Rights that do not meet such requirements will be subject to immediate
suspension and delisting
[[Page 7334]]
procedures. If the Exchange commences delisting procedures in either of
the circumstances with respect to Prospective Listing Rights set forth
in this paragraph, the issuer of the Prospective Listing Rights will
not be eligible to avail itself of the provisions of Sections 802.02
and 802.03 and any such Prospective Listing Rights will be subject to
delisting procedures as set forth in Section 804.00.
Finally, as the definition of ``public holders'' will now also be
used in the proposed listing requirements for Prospective Listing
Rights, the Exchange proposes to move that definition to the end of
Section 703.12(II) without changing the wording of the definition in
any way.
The Exchange also proposes to amend Section 102.01F (``Policy on
Listing Reverse Merger Companies''). Section 102.01F currently excludes
acquisition companies listed under Section 102.06 from its requirements
and the Exchange proposes to add commentary to Section 102.01F
specifying that Section 102.01F is not applicable to any business
combination involving the exercise of Prospective Listing Rights listed
under Section 703.12(II).
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\4\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \5\ in particular, in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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The adoption of listing standards for Prospective Listing Rights
will provide an additional pathway for operating assets to enter the
public markets. As such, the Exchange believes that its proposed
listing standard will enhance competition by providing investors with
an opportunity to make public market investments in assets that would
otherwise be available only to the more limited group of investors that
have access to investments in private assets. Prospective Listing
Rights will also provide a source of capital for the acquisition of
assets and will therefore create additional competition for the sale of
such assets.
The Exchange believes that the proposed listing standard provides
significant protections to investors with respect to the funds they
submit in connection with exercises of their Prospective Listing
Rights, by requiring that any funds paid upon exercise of Prospective
Listing Rights by the holders thereof must be held in a trust account
controlled by an independent custodian until consummation of the
transaction in connection with which such Prospective Listing Rights
are being exercised. A significant additional investor protection is
provided by the requirement that Prospective Listing Rights must
provide by their terms that the funds held in trust will promptly be
returned to the holders who have submitted the required exercise price
in the event that the transaction agreement is terminated or is not
consummated within one year of the initial listing of such Prospective
Listing Rights. A related form of investor protection is provided by
the requirement that any series of Prospective Listing Rights must
terminate by its terms if the transaction with respect to which the
exercise of the Prospective Listing Rights is being solicited is not
consummated within one year of the commencement of trading of such
Prospective Listing Rights on the Exchange.
The Exchange notes the existence of a significant protection of the
interests of existing shareholders of listed common stock where the
listed issuer grants rights to recipients other than the existing
shareholders of that listed class. Section 312.03(c) of the Manual
requires (subject, generally, to exceptions for cash sales at the
Minimum Price \6\ and public offerings) that a listed issuer must
obtain shareholder approval prior to the issuance of common stock, or
of securities convertible into or exercisable for common stock, in any
transaction or series of related transactions if: (1) the common stock
has, or will have upon issuance, voting power equal to or in excess of
20% of the voting power outstanding before the issuance of such stock
or of securities convertible into or exercisable for common stock; or
(2) the number of shares of common stock to be issued is, or will be
upon issuance, equal to or in excess of 20% of the number of shares of
common stock outstanding before the issuance of the common stock or of
securities convertible into or exercisable for common stock. Nasdaq
Rule 5635 and NYSE American Company Guide Section 713 include
comparable requirements. Consequently, generally, rights offerings by
listed issuers of common stock or of securities that are convertible
into or exercisable for common stock would be subject to shareholder
approval if the rights were being issued to recipients other than the
holders of the listed common stock and (1) the shares of common stock
underlying the rights have, or will have upon issuance, voting power
equal to or in excess of 20% of the voting power outstanding before the
issuance of such stock or of securities convertible into or exercisable
for common stock; or (2) the number of shares of common stock to be
issued is, or will be upon issuance, equal to or in excess of 20% of
the number of shares of common stock outstanding before the issuance of
the common stock or of securities convertible into or exercisable for
common stock. As such, the holders of the listed common stock would
have the ability to block any rights offering that was materially
dilutive of their economic or voting interests.
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\6\ Section 312.04(h) defines ``Minimum Price'' as a price that
is the lower of: (i) the Official Closing Price immediately
preceding the signing of the binding agreement; or (ii) the average
Official Closing Price for the five trading days immediately
preceding the signing of the binding agreement. Section 312.04(i)
defines the ``Official Closing Price'' of the issuer's common stock
as the official closing price on the Exchange as reported to the
Consolidated Tape immediately preceding the signing of a binding
agreement to issue the securities. For example, if the transaction
is signed after the close of the regular session at 4:00 p.m.
Eastern Standard Time on a Tuesday, then Tuesday's official closing
price is used. If the transaction is signed at any time between the
close of the regular session on Monday and the close of the regular
session on Tuesday, then Monday's official closing price is used.
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The Exchange believes it is consistent with the protection of
investors to expand the circumstances in which a right may be listed to
permit the listing of a right where the security into which such right
is exercisable will be listed upon exercise of the rights and such
exercise is pursuant to a Securities Act Registration Statement that
has been declared effective by the SEC prior to or simultaneous with
the listing of such rights (i.e., Prospective Listing Rights). The
requirement that there be an effective Securities Act Registration
Statement in relation to the exercise of the rights prior to or
simultaneous with the listing of the Prospective Listing Rights would,
in the Exchange's view, provide a significant investor protection as it
would ensure that investors trading or exercising the Prospective
Listing Rights would have access to the appropriate level of disclosure
to enable them to make informed investment decisions. In particular,
the Exchange
[[Page 7335]]
believes that the availability of an effective Securities Act
Registration Statement at the time of initial listing of the
Prospective Listing Rights including disclosure about the anticipated
business and financial position of the issuer as it will exist upon
exercise of the Prospective Listing Rights (and the listing of the
underlying securities on the Exchange) will provide investors in the
Prospective Listing Rights with the ability to make judgments about the
anticipated value of the underlying securities by making comparisons to
the market values of comparable listed companies. The Exchange also
believes that the obligation of the issuer of Prospective Listing
Rights under the Securities Act and the rules thereunder to amend the
Securities Act Registration Statement up to the time of exercise of the
Prospective Listing Rights to reflect any material changes in the
issuer's business or financial condition will ensure that investors
will have access to adequate disclosure to enable them to value the
securities throughout the life of the Prospective Listing Rights.
Furthermore, the issuer of Prospective Listing Rights would be subject
to the requirements of Sections 202.05 and 202.06 of the Manual, which
require immediate disclosure of all material news. The Exchange
believes that these requirements under the securities laws and Exchange
rules will provide investors in Prospective Listing Rights with an
appropriate level of access to information to make investment decisions
and that this robust level of disclosure will also act as a significant
safeguard against illegal manipulation of the securities.
As proposed, Prospective Listing Rights must meet initial listing
requirements of at least (i) 1,000,000 rights issued, (ii) an initial
trading price on the Exchange of at least $1.00 per Prospective Listing
Right, (iii) a market value of publicly-held securities of at least $10
million, and (iv) 400 public holders of round lots. In addition, listed
Prospective Listing Rights would be subject to the prompt commencement
of suspension and delisting procedures if (i) it is determined that the
security for which the Prospective Listing Rights are exercisable will
not be listed on the Exchange, (ii) the market value of publicly-held
shares of a series of Prospective Listing Rights falls below $4,000,000
or (iii) the trading price per Prospective Listing Right falls below
$0.10. If the Exchange commences delisting procedures in the
circumstances with respect to Prospective Listing Rights set forth in
this paragraph, the issuer of the Prospective Listing Rights will not
be eligible to avail itself of the provisions of Sections 802.02 and
802.03 and any such listed rights will be subject to delisting
procedures as set forth in Section 804.00. The Exchange believes that
these initial and continued listing requirements will protect investors
by helping to ensure trading liquidity in the Prospective Listing
Rights and also ensuring that such rights will not be traded unless the
underlying security is expected to list on the Exchange. The Exchange
notes that the proposed initial and continued quantitative listing
standards for Prospective Listing Rights are identical to (or, in the
case of the market-value of publicly-held shares requirement more
rigorous than) those required for securities to be listed under the
``equity'' standards (i.e., for trading on the NYSE's trading floor)
under Section 703.19 (``Other Securities'') of the Manual and that the
$0.10 per security continued price requirement is consistent with the
NYSE's policy with respect to the delisting of equity securities with
abnormally low trading prices. As the Exchange has extensive experience
with the application of those standards with respect to other types of
securities and believes that they have provided adequate investor
protection when used in that context, the Exchange believes that these
standards will also provide adequate protection to investors in
Prospective Listing Rights.
The Exchange believes that its existing surveillance procedures are
adequate to enable it to detect manipulative trading practices with
respect to Prospective Listing Rights. The Exchange notes that the NYSE
and other self-regulatory organizations have extensive experience in
conducting surveillance of the trading in securities whose value, like
that of Prospective Listing Rights, is substantially dependent on the
issuer's future acquisition of an identified operating asset, including
for example, listed SPACs that are trading on the Exchange after
entering into a definitive agreement with respect to a business
combination. The Exchange also believes that market participants are
able to arrive at market prices for such securities without excessive
volatility and that this experience provides a reasonable basis for
understanding how Prospective Listing Rights are likely to trade.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change will increase competition because the adoption
of listing standards for Prospective Listing Rights will provide an
additional pathway for operating assets to enter the public markets. As
such, the Exchange believes that its proposed listing standard will
enhance competition by providing investors with an opportunity to make
public market investments in assets that would otherwise be available
only to the more limited group of investors that have access to
investments in private assets. Prospective Listing Rights will also
provide a source of capital for the acquisition of assets and will
therefore create additional competition for the sale of such assets.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
A. by order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#4735322b226a24282a2a222933340734222469202831"><span class="__cf_email__" data-cfemail="4133342d246c222e2c2c242f3532013224226f262e37">[email protected]</span></a>. Please include
file number SR-NYSE-2026-05 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
[[Page 7336]]
All submissions should refer to file number SR-NYSE-2026-05. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-NYSE-2026-05 and should be submitted on
or before March 10, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-03016 Filed 2-13-26; 8:45 am]
BILLING CODE 8011-01-P
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