NYSE Amends Shareholder Approval Rules For Substantial Security Holders

On December 26, 2023, the Securities and Exchange Commission approved New York Stock Exchange rule amendments limiting the "substantial securities holders" to which the shareholder approval requirements of Section 312.03(b)(i) of the NYSE Listed Company Manual (Manual) apply to a newly defined class of "Active Related Parties."

Prior to the amendments, Section 312.03(b)(i) required shareholder approval before an issuance of common stock, or securities convertible into or exercisable for common stock, in any transaction or series of related transactions, to a director, officer, or substantial security holder¹ of the company if the number of shares of common stock to be issued, or the number of shares of common stock into which the securities may be convertible or exercisable, exceeds either 1% of the number of shares of common stock or voting power outstanding before the issuance. There is an exception for cash sales for a price that is at least the Minimum Price.² A