On September 29, 2021, the Securities and Exchange Commission released a notice filed by the New York Stock Exchange (“NYSE”) of a proposed rule change. The NYSE seeks approval of a proposed amendment to the shareholder voting requirement set forth in Section 312.07 of the NYSE Listed Company Manual (the “Manual”).
Currently, Section 312.07 provides that, where shareholder approval is required for the listing of any new or additional securities, or where any matter requires shareholder approval, including for stock issuances pursuant to an equity compensation plan, the minimum vote required is a majority of “votes cast”. The Manual does not specifically address the treatment of abstentions, however the NYSE has historically taken the position that abstentions should be treated as “votes cast” for purposes of Section 312.07. A proposal is deemed approved under this approach if the votes in favor exceed the aggregate of the votes cast against the proposal plus abstentions. This approach has led to some confusion as the corporate laws of many states, including Delaware, permit companies to elect in their governing documents that “votes cast” do not include abstentions.
The NYSE proposal would amend Section 312.07 to provide that an issuer should determine whether a proposal has received a sufficient number of votes cast in accordance with its own governing documents and applicable state law. This approach is consistent with how NASDAQ treats abstentions.
The NYSE proposal can be found here. The SEC is seeking public comment on the proposed rule change within 21 days after publication in the Federal Register. The SEC generally must approve or disapprove the proposed rule change within 45 days of publication. In the meantime, NYSE-listed companies may wish to review their governing documents in light of this anticipated rule change.
KMK Law articles and blog posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. The laws/regulations and interpretations thereof are evolving and subject to change. Although we will attempt to update articles/blog posts for material changes, the article/post may not reflect changes in laws/regulations or guidance issued after the date the article/post was published. Please consult with counsel of your choice regarding any specific questions you may have.
ADVERTISING MATERIAL.
© 2023 Keating Muething & Klekamp PLL. All Rights Reserved
- Partner
Jim Kennedy practices in the Business Representation & Transactions Group. The focus of his practice is corporate, securities, and financing law, where he has extensive experience in mergers, acquisitions and ...
- Partner
Mark Reuter advocates for business clients in transactions, proceedings and conflicts regulated by federal and state securities laws and stock exchange rules. A partner in the firm’s Business Representation & Transaction ...
- Partner
As a partner in the firm’s Business Representation & Transactions Group, Allie Westfall’s insight and proven analytical skills help translate the complexities of the often-challenging securities laws. Allie’s counsel ...
- Partner
Chris Brinkman practices in the firm's Business Representation & Transactions Group with a concentration in venture capital transactions, start-ups & growth companies, securities, and mergers and acquisitions.
Chris ...
- Associate
Michael Goldman counsels businesses and investors on a broad range of general corporate transactions, with a particular focus on the sports and entertainment industry and commercial transactions involving technology ...
Topics/Tags
Select- Securities Law
- SEC
- Securities Regulation
- Corporate Law
- Clawback Rules
- SEC Enforcement
- Nasdaq
- Coronavirus
- Cybersecurity and Privacy Law
- Mergers & Acquisitions
- Dodd-Frank
- Tax Planning
- IRS
- Economic Sanctions
- Ohio LLC Act
- Paycheck Protection Program
- Corporate Tax
- JOBS Act
- FAST Act
- Proxy Access Rules
- Corporate Governance
- Securities Litigation
- Consumer Protection Act
- Cybersecurity Regulation
- Crowdfunding
- Cryptocurrency
- Hedging
- Conflict Minerals
- Real Estate Law
- Emerging Growth Companies
- Investors
- Taxation
- Private Offerings
- Pay Ratio Disclosure
- Whistleblower
- Intellectual Property
- Technology
- Opportunity Zone
- LIBOR
- Accredited Investors
- Sales Tax
- United States Supreme Court
- Executive Compensation
- Health Care Act
- Online Trading Platforms
- IPO
- Registration Statement
- Wall Street Reform
- Annual Reports
- Ohio Foreclosure Reform
- Director Compensation
- Family-Controlled Entities
- Gift and Estate Transfers
- Board of Directors
- Director Independence
- Total Shareholder Return
- Cyber Insurance
- Data Breach
- Lenders
- Receivership Statute
- Regulation A
- Regulation D
- Compensation Committee Certification
- CDEs
- CDFI Fund
- Community Development Entities
- Community Development Financial Institutions Fund
- Government Shutdown
- New Markets Tax Credit
- NMTC
- NMTC Financing
- Regulation Fair Disclosure
- Social Media
- Marketing
- Benefits
- Healthcare Reform
- Litigation
- Public Company Transition Rules
- Employment Incentives
- HIRE Act
- Social Security Tax
- Tax Credit
Recent Posts
- Effective Date of SEC Clawback Rule Finally In Sight
- SEC Sued Over Newly Adopted Share Repurchase Rules
- SEC Extends Period to Act on Exchange Clawback Rules
- SEC Charges Public Company for Misleading Non-GAAP Disclosures
- NYSE and Nasdaq Propose Clawback Listing Standards: What You Need to Know
- Corporate Transparency Act Update – FinCEN Issues Notice of Proposed Rulemaking
- SEC Amends Insider Trading Rules: New Conditions, Requirements, and Related Disclosures
- SEC Reopens Comment Period for 11 Proposed Rules Due to Technological Error
- Corporate Transparency Act Update—FinCEN Issues Final Rule
- SEC Provides Sample Guidance on Disclosure of Russia-Ukraine Invasion