NYSE’s Complex Shareholder Approval Rules for Issuing New Securities and Shareholder Approval

Summary

This practice note discusses the New York Stock Exchange (NYSE)’s requirements applicable to listed companies to receive shareholder approval in connection with certain transactions, including issuing equity and convertible securities, which are in addition to any applicable requirements under state law and the U.S. Securities and Exchange Commission (SEC) rules. Although these rules can be seen as complex and technical, it is very important to understand them especially considering the extra time and expense that may come with the shareholder approval process. Under Section 312.03 of the NYSE Listed Company Manual, shareholder approval by a majority of votes cast on a proposal is a prerequisite to issuing securities in connection with any of the following situations: