SEC Approves NYSE's Closed-End Fund Listing Criteria

Washington, DC, May 12, 1999 - On January 26, 1999, the Securities and Exchange Commission (SEC) published for comment, and at the same time granted accelerated approval to a portion of, a proposed rule change filed by the New York Stock Exchange (NYSE). The proposed rule change instituted a pilot program amending the NYSE's Listed Company Manual to codify its policy regarding the listing of newly organized closed-end funds. The pilot program was set to expire on April 29, 1999, or at an earlier time if the SEC approved the NYSE's request for permanent approval of the program before that date. On April 21, 1999, the NYSE submitted an amendment (dealing with spin-offs and carve-outs) to the proposed rule change. On April 29, 1999, the SEC approved the proposed rule change, as amended. The Institute had submitted a comment letter on the proposal.

Under the NYSE's new listing eligibility criteria, if a fund has at least $60 million in net assets, as evidenced by a firm underwriting commitment, the NYSE will generally authorize the listing of the fund. The NYSE noted that this requirement is the minimum net asset requirement for listing. The NYSE retains the discretion to deny listing to a fund if it determines that, based upon a comprehensive financial analysis, it is unlikely that the fund will be able to maintain its financial status. Any fund with less than $60 million in net assets will not be considered for listing. Funds also will be subject to continued financial listing criteria, as are all NYSE-listed companies.

In its order approving the proposed rule change, the SEC concluded that the net asset requirement codified by the NYSE in the proposal is a clear, nondiscriminatory standard that should promote transparency with respect to the NYSE listing standards for funds. The SEC also stated that it believes the proposed standard should promote certainty and reduce costs in the listing process which should benefit investors and other market participants.