SEC Approves NYSE Closed-End Listing Standards Proposal

Washington, DC, June 29, 2005 - The SEC recently published for comment, and granted accelerated approval to, a proposal filed by the New York Stock Exchange to strengthen its continued listing standards. A number of Institute recommendations are included in the final rule.

Background
In March, the NYSE issued a proposal to strengthen certain aspects of its listing standards for closed-end funds and other issuers. NYSE rules had required individual closed-end funds to have a market value of $60 million in order to list on the Exchange; closed-end funds that are part of a family of funds needed to have a market value of $30 million in order to list.

Under the NYSE's March proposal, suspension and delisting procedures would be initiated against any closed-end fund with a market value below $25 million for 30 consecutive trading days. Therefore, while an individual closed-end fund would have to experience a 58 percent decline in market value in order to be delisted, a closed-end fund in a fund family could be delisted after losing only 16 percent of its market value.

However, the final rules approved by the SEC incorporate measures that were supported by the Institute in an April 2005 comment letter:

The continued listing criteria for closed-end funds will remain at $15 million (rather than be increased to $25 million, as proposed). Accordingly, the NYSE will initiate suspension and delisting procedures with respect to any closed-end fund if its average market capitalization over 30 consecutive trading days is below $15 million.
The notification threshold will remain at $25 million (rather than being increased to $35 million, as proposed). Therefore, the NYSE will notify a closed-end fund if its average market capitalization falls below $25 million.

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