NYSE Contingent Value Rights

NYSE Contingent Value Rights

On 9 May 2019, NYSE proposed listing rules of contingent value rights.

  • Proposed to expand circumstances under which contingent value right to be listed.

Rule Proposal

  • Contingent value rights (CVRs) are unsecured obligations providing for a possible cash payment at maturity based on the price performance of equity (price-based).
  • Or cash payment within a certain time period, upon the occurrence of a specified
    event relating to business of the issuer (event-based), currently only price-based.
  • Proposed rule to expand the listing requirements, now include event-based CVRs, identical in structure to price based CVRs, which permitted listed for many years.

Listing Standards

  • Updated listing standards for operating companies, need retained $100mn assets
    but proposed to amend reference to size and earnings requirements of an issuer.
  • Must meet the size requirements applicable to all newly-listed operating company i.e., $100mn market value of publicly-held shares, and $4 stock price requirement.
  • Modified delisting provisions where CVR delisted if issuer common stock ceases to list on national exchange, reflect that event-based CVRs not tied to performance.

Effectiveness

  • On 25 April 2019, NYSE initially proposed, on 9 May, SEC published rule proposal.
  • Comments should be submitted on, before 21 days publication in federal register.