ICI Recommends Changes to NYSE's Listing Rule Proposal

Washington, DC, April 13, 2005 - ICI has urged the New York Stock Exchange (NYSE) to revise its listing standards for closed-end funds in a fund family, making it easier for a fund family to list all of its funds on the NYSE.

Background
In March, the NYSE issued a proposal to strengthen certain aspects of its listing standards for closed-end funds and other issuers. NYSE adjusts its listing standards periodically to ensure that the standards recognize and reflect current market conditions.

Current NYSE rules require 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 need to have a market value of $30 million in order to list.

However, under the NYSE's proposal, the NYSE would initiate suspension and delisting procedures 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.

ICI Position
In a recent comment letter, ICI states its opposition to applying the new continued listing standard to closed-end funds in a fund family. Rather, the Institute urges the NYSE to take into account the unique initial listing standards for closed-end funds in a fund family, and set the continued listing standard for those types of closed-end funds at $15 million. ICI notes that this approach would make the NYSE's size requirement for the continued listing of closed-end funds more proportional to its size requirements for their initial listing and make the standards more consistent with the Exchange's continued listing standards for other issuers. It also would further the NYSE's goal of making it easier for fund families to list all of their funds on one exchange.

Related Links
ICI commented on a similar continued listing proposal submitted by the American Stock Exchange in December 2002. In addition, a section of this website is devoted to other securities market issues impacting mutual funds.