On December 6, 2019, the Securities and Exchange Commission (“SEC”) rejected the proposal submitted by the New York Stock Exchange (“NYSE”) to allow companies to simultaneously go public through a direct listing and raise cash from public market investors. As we previously blogged, the NYSE’s proposed rule would have incorporated an option to raise capital into the existing direct listing alternative. The SEC did not provide a public comment on its rejection of the NYSE’s proposal. However, following the rejection, the NYSE released a statement that it expects to continue to work with the SEC on the initiative. Separately, on December 3, 2019, the SEC extended the ability of companies to consummate direct listings (without raising additional capital) on The Nasdaq Global Market and The Nasdaq Capital Market.
