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SEC Rejects Initial NYSE Proposal on Capital Raising in Direct Listings

The rule change would have allowed companies to raise capital in a direct listing.

Update: This Alert has been updated by a subsequent release.

On December 6, 2019, the U.S. Securities and Exchange Commission rejected a proposed New York Stock Exchange ("NYSE") rule change that would allow companies to raise capital in a direct listing and, subject to satisfaction of additional valuation requirements, provide a 90-day grace period for the requirement to have 400 round lot holders. The NYSE has indicated that it intends to revise and resubmit the proposal. The Nasdaq Stock Market is also working on a proposal to permit capital raising in direct listings. For additional information, see our prior Commentary on the NYSE proposal.

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