On August 4, 2011, the New York Stock Exchange LLC ("NYSE") and NYSE Amex
proposed more stringent rules governing reverse merger companies - companies that became public without having to meet the strict rules covering IPOs. The proposed rules contain a series of "seasoning" requirements that would effectively delay exchange listings for reverse merger companies.
Under the proposed standards that the NYSE submitted to the SEC, reverse merger companies would have to trade for at least a year in the U.S. over-the-counter market, or on another U.S. exchange or a regulated foreign exchange before obtaining an NYSE listing. They would also be required to maintain a minimum $4 stock price for a "sustained" period, and would have to file audited financial statements and an annual report with the SEC. In addition, the NYSE would have the discretion to impose tougher requirements on a particular reverse merger company if the exchange deems warranted.
The NYSE's move followed an SEC warning to investors about the risks associated with reverse merger companies.