Notice2026-11280
Self-Regulatory Organizations; NYSE American LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend Sections 1003 and 1009 of the NYSE American Company Guide
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
June 5, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 108 (Friday, June 5, 2026)</title>
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[Federal Register Volume 91, Number 108 (Friday, June 5, 2026)]
[Notices]
[Pages 34263-34265]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-11280]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105597; File No. SR-NYSEAMER-2026-17]
Self-Regulatory Organizations; NYSE American LLC; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change To Amend Sections 1003 and 1009 of the NYSE
American Company Guide
June 2, 2026.
I. Introduction
On March 6, 2026, NYSE American LLC (``NYSE American'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend Sections 1003 and 1009 of the NYSE
American Company Guide (``Company Guide'') to establish that an issuer
must maintain a certain market capitalization in order to remain listed
on the Exchange. The proposed rule change was published for comment in
the Federal Register on March 20, 2026.\3\ On April 29, 2026, pursuant
to Section 19(b)(2) of the Act,\4\ the Commission designated a longer
period within which to take action on the proposed rule change.\5\ The
Commission is instituting proceedings pursuant to Section 19(b)(2)(B)
of the Act \6\ to determine whether to approve or disapprove the
proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 105036 (Mar. 17,
2026), 91 FR 13645 (``Notice''). Comments received on the proposed
rule change are available at: <a href="https://www.sec.gov/rules-regulations/public-comments/sr-nyseamer-2026-17">https://www.sec.gov/rules-regulations/public-comments/sr-nyseamer-2026-17</a>.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 105334, 91 FR 24023
(May 4, 2026). The Commission designated June 18, 2026, as the date
by which the Commission should approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
change. See id.
\6\ 15 U.S.C. 78s(b)(2)(B).
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II. Description of the Proposed Rule Change
Section 1003 of the Company Guide sets forth minimum quantitative
and qualitative continued listing standards for securities listed on
the Exchange.\7\ Currently, Section 1003(b)(i) of the Company Guide
enumerates circumstances where the Exchange will consider suspension
and delisting of a class of common stock because of a sufficiently
limited distribution of shares.\8\ Section 1003(b)(i) does not contain
a minimum market capitalization requirement.\9\
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\7\ See Notice, supra note 3, at 13645. Specifically, Section
1003 of the Company Guide requires issuers of common stock to
maintain certain quantitative minimum standards related to
stockholders' equity, publicly held shares, public shareholders, and
aggregate market value of publicly held shares. In addition, Section
1003 sets forth qualitative continued listing standards related to,
among other things, operations contrary to public interest and
reduction of operations. See id.
\8\ See id. See also Section 1003(b) of the Company Guide.
\9\ See Notice, supra note 3, at 13645.
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The Exchange states that it has noticed a recent increase in
companies that have a very small market capitalization.\10\ According
to the Exchange, an issuer with a small market capitalization is
potentially susceptible to manipulation and more likely to experience
trading volatility in its shares because, at smaller sizes, less
capital is required to undertake manipulative trading activity.\11\
Therefore, the Exchange proposes to amend Section 1003 of the Company
Guide to require an issuer to maintain a certain market capitalization
in order to remain listed on the Exchange.\12\
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\10\ See id.
\11\ See id.
\12\ See id.
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Specifically, the Exchange proposes to adopt new Section
1003(b)(i)(D) of the Company Guide to specify that if an issuer's class
of common stock is determined to have average market capitalization
over a consecutive 30 trading-day period of less than $5 million
(``Minimum Market Capitalization Criteria''), the Exchange will
immediately suspend trading and commence delisting proceedings with
respect to such security in accordance with the procedures in Section
1010 of the Company Guide.\13\ The Exchange also proposes that an
issuer that falls below the Minimum Market Capitalization Criteria
would not be eligible to follow the procedures to regain compliance
outlined in Section 1009 of the Company Guide.\14\ The Exchange states
that all issuers would retain the right to appeal an Exchange delisting
decision.\15\
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\13\ See id. For purposes of Section 1003 of the Company Guide,
market capitalization includes the total common stock outstanding
(excluding treasury shares) as well as any common stock that would
be issued upon conversion of another outstanding equity security, if
such other security is a ``substantial equivalent'' of common stock.
See footnote to Section 1003 of the Company Guide.
\14\ See Notice, supra note 3, at 13645. The Exchange also
proposes to amend Section 1009 of the Company Guide to add to the
list of continued listing standards for which noncompliance does not
entitle the issuer to a compliance period a reference to proposed
Section 1003(b)(i)(D) of the Company Guide. See id. See also
proposed Section 1009(a)(ii) of the Company Guide.
\15\ See Notice, supra note 3, at 13646. See also Part 12 of the
Company Guide (setting forth the procedures for appealing an
Exchange delisting decision).
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The Exchange states that, in its experience, an issuer with a
sustained market capitalization below $5 million is likely to be
financially distressed and is increasingly susceptible to manipulation
due to its small size.\16\ The Exchange also states that having a
market capitalization below $5 million is frequently a leading
indicator that an issuer has other financial concerns that often
require a substantial amount of regulatory oversight, and accordingly,
the Exchange does not believe that an issuer fitting this profile is
appropriate for continued listing on the Exchange.\17\ Further, the
Exchange states that, in its experience, a company trading at a
sustained market capitalization below $5 million is unlikely to regain
financial stability and it is therefore appropriate to subject the
company to immediate suspension and delisting.\18\
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\16\ See Notice, supra note 3, at 13645.
\17\ See id. at 13645-6.
\18\ See id. at 13646.
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The Exchange states that the proposal would become effective
immediately upon Commission approval.\19\
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\19\ See id.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEAMER-2026-17 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \20\ to determine whether the proposed rule
change should be approved or disapproved. Institution of such
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposed rule change. Institution of proceedings
does not indicate that the Commission has reached any conclusions with
respect to any of the issues involved. Rather, as described below, the
Commission seeks and encourages interested persons to provide
additional comment on the
[[Page 34264]]
proposed rule change to inform the Commission's analysis of whether to
approve or disapprove the proposed rule change.
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\20\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\21\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of, and input from commenters with respect to, the proposed
rule change's consistency with the Act, and in particular, Section
6(b)(5) of the Act,\22\ which requires, among other things, that the
rules of a national securities exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, 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 not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers; and Section 6(b)(7) of the Act,\23\ which
requires, among other things, that the rules of an exchange provide
fair procedure for the prohibition or limitation by the exchange of any
person with respect to access to services offered by the exchange.
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\21\ Id.
\22\ 15 U.S.C. 78f(b)(5).
\23\ 15 U.S.C. 78f(b)(7).
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The Commission has consistently recognized that the development and
enforcement of meaningful listing standards \24\ by an exchange is of
critical importance to financial markets and the investing public.\25\
Among other things, the Commission has stated that listing standards
provide the means for an exchange to screen issuers that seek to become
listed, and to provide listed status only to bona fide companies that
have or will have sufficient public float, investor base, and trading
interest to provide the depth and liquidity to promote fair and orderly
markets.\26\ Meaningful listing standards are also important given
investor expectations regarding the nature of securities that have
achieved an exchange listing, and the role of an exchange in overseeing
its market and assuring compliance with its listing standards.\27\
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\24\ This reference to ``listing standards'' is referring to
both initial and continued listing standards.
\25\ See, e.g., Securities Exchange Act Release No. 57785 (May
6, 2008), 73 FR 27597 (May 13, 2008) (SR-NYSE-2008-17).
\26\ See, e.g., Securities Exchange Act Release Nos. 81856 (Oct.
11, 2017), 82 FR 48296, 48298 (Oct. 17, 2017) (SR-NYSE-2017-31);
81079 (July 5, 2017), 82 FR 32022, 32023 (July 11, 2017) (SR-NYSE-
2017-11); 65708 (Nov. 8, 2011), 76 FR 70799, 70802 (Nov. 15, 2011)
(SR-NASDAQ-2011-073); 63607 (Dec. 23, 2010), 75 FR 82420, 82422
(Dec. 30, 2010) (SR-NASDAQ-2010-137); and 57785 (May 6, 2008), 73 FR
27597, 27599 (May 13, 2008) (SR-NYSE-2008-17). The Commission has
stated that adequate listing standards, by promoting fair and
orderly markets, are consistent with Section 6(b)(5) of the Act, in
that they are, among other things, designed to prevent fraudulent
and manipulative acts and practices, promote just and equitable
principles of trade, and protect investors and the public interest.
See, e.g., Securities Exchange Act Release Nos. 82627 (Feb. 2,
2018), 83 FR 5650, 5633, n.53 (Feb. 8, 2018) (SR-NYSE-2017-30);
87648 (Dec. 3, 2019), 84 FR 67308, 67314, n.42 (Dec. 9, 2019) (SR-
NASDAQ-2019-059); and 88716 (Apr. 21, 2020), 85 FR 23393, 23395,
n.22 (Apr. 27, 2020) (SR-NASDAQ-2020-001).
\27\ See, e.g., Securities Exchange Act Release Nos. 88716 (Apr.
21, 2020), 85 FR 23393 (Apr. 27, 2020) (SR-NASDAQ-2020-001); 88389
(Mar. 16, 2020), 85 FR 16163 (Mar. 20, 2020) (SR-NASDAQ-2019-089).
See also Securities Exchange Act Release No. 81856 (Oct. 11, 2017),
82 FR 48296, 48298 (Oct. 17, 2017) (SR-NYSE-2017-31) (stating that
``[a]dequate standards are especially important given the
expectations of investors regarding exchange trading and the
imprimatur of listing on a particular market'' and that ``[o]nce a
security has been approved for initial listing, maintenance criteria
allow an exchange to monitor the status and trading characteristics
of that issue . . . so that fair and orderly markets can be
maintained'').
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As discussed above, the Exchange's proposal would allow the
Exchange to immediately suspend and delist an issuer's class of common
stock if it falls below the Minimum Market Capitalization Criteria.\28\
In addition, the proposal would specify that an issuer subject to
suspension and delisting for falling below the Minimum Market
Capitalization Criteria would not be eligible to follow the procedures
to regain compliance outlined in Section 1009 of the Company Guide.\29\
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\28\ See supra note 14 and accompanying text.
\29\ See supra note 15 and accompanying text.
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One commenter states that the Exchange has not demonstrated,
through ``reasoned and evidence-based analysis,'' that its proposal is
necessary to protect investors and promote fair and orderly
markets.\30\ Specifically, the commenter states that the Exchange does
not demonstrate that the Minimum Market Capitalization Criteria ``is a
reliable predictor of sustained financial distress, manipulation risk,
or future non-compliance with existing listing standards.'' \31\ The
commenter also states that the proposal would make raising capital more
difficult for small public companies and increase risks to
investors.\32\ The commenter states that the Exchange has not shown
that ``automatic and immediate delisting,'' as opposed to a more
tailored approach, is appropriate or necessary.\33\ In addition, the
commenter states that the Commission must consider the Exchange's
proposal in conjunction with the ``overlapping'' continued listing
proposals by Nasdaq and their impact together on ``capital formation,
exchange competition, liquidity, and market stability.'' \34\ The
commenter also states that there should be a delayed effective date of
no less than twelve months to allow issuers, investors, lenders, and
other market participants time to make necessary adjustments.\35\
Finally, the commenter suggests alternatives to the proposal.\36\
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\30\ See Letter from Marc Indeglia, The Small Public Company
Coalition, dated Apr. 10, 2026, at 2-5.
\31\ Id. at 5. The commenter cites a report by Professor Craig
M. Lewis that presents an empirical study raising concerns that the
proposal may prematurely delist firms that would otherwise regain
compliance. See id. at 5-6. See also id. at 23-27 (attaching Craig
M. Lewis, Ph.D., NYSE American's Proposed Minimum Market
Capitalization Continued Listing Requirement, Apr. 10, 2026).
\32\ See id. at 7-9. This commenter states that investors would
``likewise bear substantial costs'' as ``[d]elisting shifts trading
from a national securities exchange to less transparent and liquid
venues,[ ] increasing volatility and reducing oversight.'' Id. at
11.
\33\ See id. at 13-14.
\34\ Id. at 16-17.
\35\ See id. at 18-20.
\36\ See id. at 14-16. For example, the commenter suggests (1)
using other liquidity-based thresholds (e.g., publicly held shares,
trading volume, or bid-ask spreads); (2) providing a cure period;
(3) conditioning delisting on the existence of an additional
compliance deficiency; and (4) utilizing graduated supervisory
responses, such as enhanced monitoring, watch-list status, or
disclosure obligations. See id.
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The Commission asks that commenters address the sufficiency of the
Exchange's statements in support of the proposal, which are set forth
in the Notice, in addition to any other comments they may wish to
submit about the proposed rule change. In particular, the Commission
seeks comment on whether the proposal includes sufficient analysis to
support a conclusion that the proposal to provide that an issuer's
class of common stock would be subject to immediate suspension and
delisting if it falls below the Minimum Market Capitalization Criteria,
and to specify that such issuer would not be eligible to follow the
procedures to regain compliance outlined in Section 1009 of the Company
Guide, is designed to be consistent with the requirements of Sections
6(b)(5) and 6(b)(7) of the Act \37\ or raises any new or novel concerns
not previously contemplated by the Commission.
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\37\ 15 U.S.C. 78f(b)(5), (b)(7).
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IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their data, views, and arguments with respect to the
issues
[[Page 34265]]
identified above, including the issues raised by the commenter, as well
as any other concerns they may have with the proposal. In particular,
the Commission invites the written views of interested persons
concerning whether the proposed rule change is consistent with Sections
6(b)(5), 6(b)(7), or any other provision of the Act, or the rules and
regulations thereunder. Although there do not appear to be any issues
relevant to approval or disapproval that would be facilitated by an
oral presentation of data, views, and arguments, the Commission will
consider, pursuant to Rule 19b-4 under the Act,\38\ any request for an
opportunity to make an oral presentation.\39\
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\38\ 17 CFR 240.19b-4.
\39\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants to
the Commission flexibility to determine what type of proceeding--
either oral or notice and opportunity for written comments--is
appropriate for consideration of a particular proposal by a self-
regulatory organization. See Securities Acts Amendments of 1975,
Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75,
94th Cong., 1st Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by June 26, 2026. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
July 10, 2026. The Commission asks that commenters address the
sufficiency of the Exchange's statements in support of the proposal, in
addition to any other comments they may wish to submit about the
proposed rule change.
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#d5a7a0b9b0f8b6bab8b8b0bba1a695a6b0b6fbb2baa3"><span class="__cf_email__" data-cfemail="a3d1d6cfc68ec0cccecec6cdd7d0e3d0c6c08dc4ccd5">[email protected]</span></a>. Please include
file number SR-NYSEAMER-2026-17 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.
All submissions should refer to file number SR-NYSEAMER-2026-17. 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-NYSEAMER-2026-17 and should be submitted
by June 26, 2026. Rebuttal comments should be submitted by July 10,
2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\40\
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\40\ 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-11280 Filed 6-4-26; 8:45 am]
BILLING CODE 8011-01-P
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