On August 4, the New York Stock Exchange LLC filed a proposed rule change with the Securities and Exchange Commission to adopt additional initial listing requirements for companies that have become public through transactions in which unlisted private operating companies merge into publicly traded shell companies, commonly known as reverse mergers. The proposed amendments are similar to rules proposed by the NASDAQ Stock Market LLC and described in the April 29 edition of the Corporate and Financial Weekly Digest.
According to the NYSE, the amendments to Rules 102.01 and 103.01 are being proposed in response to widespread concerns of accounting fraud by reverse merger companies. The proposed amendments provide that a reverse merger company would not be eligible for listing unless the combined entity had immediate preceding the filing of its initial listing application...
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