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

[Federal Register Volume 91, Number 108 (Friday, June 5, 2026)]

[Notices]

[Pages 34263-34265]

From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ]

[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: https://www.sec.gov/rules-regulations/public-comments/sr-nyseamer-2026-17 .

\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

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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

Use the Commission's internet comment form ( https://www.sec.gov/rules/sro.shtml ); or

Send an email to [email protected] . Please include

file number SR-NYSEAMER-2026-17 on the subject line.

Paper Comments

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 ( https://www.sec.gov/rules/sro.shtml ). 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