Author: Jinli
Since the outbreak of the epidemic around the world, countries have begun to issue bans on short trading. On February 28, the Turkish Regulatory Bureau banned the market from shorting stocks on the Istanbul Stock Exchange. Subsequently, many countries such as South Korea, Indonesia, France, Italy, and the Philippines introduced measures to prohibit short selling. On March 13, the UK Financial Conduct Authority temporarily banned some short selling instruments and transactions, including banning short selling of stocks.
April 7 news came from news that New York Stock Exchange said it was negotiating with regulators and proposed to temporarily relax restrictions on short trading and cancel some rules in its listed company manual to alleviate the pressure on companies that may face delisting risk due to the COVID-19 pandemic.
SEC spokesman Farrell Kramer said the SEC initially rejected a proposal that required regulators to relax regulatory requirements for certain proposed listed companies by June 30.
"In conversations with listed companies, the NYSE learned that many companies' businesses have been severely disrupted during the current crisis, including employees who have contracted the new coronavirus and mandatory measures taken to protect their employees from infection," the NYSE said in its original document.
Since its all-time high in mid-February, the S&P 500 has fallen by more than 20%, and the market has fluctuated violently due to the COVID-19 pandemic that has caused many companies to pause and triggered large-scale layoffs. In order to reduce the uncertainty of companies during difficult market conditions, the New York Stock Exchange said it hopes that the SEC will temporarily suspend the hard requirements for listed companies to trigger the delisting process if their stock price is less than US$1 and their average market value is less than US$50 million for 30 consecutive trading days.
New York Stock Exchange added that rating companies below compliance could also have a negative impact on investors' perceptions of these companies, although the decline in stock prices of many of them is due to the overall market being oversold, rather than specific factors for the company itself.
