On November 6, 2018, the NYSE proposed a rule change that conforms the definition of smaller reporting company (“SRC”) to the recent amendments made by the Securities and Exchange Commission (“SEC”) earlier this year. Under the SEC’s amendments a company with a public float of less than $250 million now qualifies as a SRC. Additionally, a company with no public float or with a public float of less than $700 million will qualify as an SRC if it had annual revenues of less than $100 million during its most recently completed fiscal year. The NYSE’s proposed rule change relates to the exemption from the compensation committee requirements applicable to SRCs. Under current NYSE rules, SRCs benefit from certain exemptions and are not required to comply with various compensation committee requirements. However, the current NYSE rule references the outdated SEC definition of SRC. The NYSE’s proposed rule aligns the amended definition of SRC by eliminating the $75 million threshold in the NYSE rule and follows the SEC’s recently amended definition. A copy of the proposed rule can be found here.
