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The New York Stock Exchange said on Monday it was in talks with regulators to temporarily ease its listing requirements to take the strain off companies that may have fallen out of compliance due to the market rout spurred by the coronavirus.
The U.S. Securities and Exchange Commission initially rejected a proposal to waive certain ongoing listing requirements until the end of June that the NYSE, owned by Intercontinental Exchange Inc, had filed on Friday as immediately effective, Farrell Kramer, a spokesman for the exchange said.
"We are committed to advocating on behalf of our issuers during these challenging economic times and continue to speak with the SEC staff about this and other proposed rule changes," Kramer said.
The S&P 500 has lost more than 20% since its all-time highs in mid-February, with extreme volatility whipsawing markets as the novel coronavirus has brought many businesses to a standstill and sparked mass layoffs.
To reduce the uncertainty for companies during the difficult market conditions, the NYSE said it wants to temporarily suspend the requirement to maintain a share price of more than $1 and an average global market capitalization above $50 million for 30 consecutive trading days.
"In its conversations with listed companies, the Exchange has learned that many companies are experiencing severe disruptions to their businesses during the current crisis, including employees who have contracted the COVID-19 virus and the need to adopt emergency measures to protect their employees from infection," the NYSE said in its original filing.
Designating companies as below compliance could also have a negative effect on investor perceptions of those companies, even though many of them have seen their share prices drop due to general market conditions rather than any company specific factors, the exchange added.
The last time the exchange temporarily suspended the ongoing listings standards was in 2009 during the financial crisis, helping avoid a costly wave of delistings.
(Reporting by John McCrank; Editing by Tom Brown)