The New York Stock Exchange today submitted an amendment to the Securities and Exchange Commission to allow more direct quotes.
Direct quotes offer companies an optimized way to go public and raise capital than traditional IPOs. This requires a lengthy roadshow process and the involvement of subscribers in the determination of valuations and share prices.
Traditionally, companies have only had direct quotes to raise capital after they have completed the conventional IPO.
The NYSE allowed tech companies Slack and Spotify are scheduled to be listed directly in 2018 and 2019, and Silicon Valley insiders like VC Bill Gurley have encouraged companies to continue using this method.
AirBNB – which revived talks about the IPO in 2020 this month – has announced that it is considering direct listing rather than traditional IPO.
The NYSE submitted a proposal to the SEC in December to allow more direct quotes, but was rejected without public comment.
The change offered today provides further details on how the direct listing process works, with a capital increase, according to NYSE Vice Chairman John Tuttle.
"What we did compared to the early versions of the filing is to offer a very detailed, mechanical breakdown of how we would conduct this type of transaction," he told theinformationsuperhighway when he called.
Most of it depends on how new shares are numbered, valued and valued in a direct listing. Traditional IPOs are based on underwriters who also charge high fees to determine the opening price and which can fluctuate widely once the stock actually hits the market.
The NYSE is promoting direct quotes as a cheaper way to go public, which could result in a less volatile pricing process.
When the NYSE proposed proposal for direct listing could be approved or (rejected): “The schedule is with the SEC. Your first deadline for action is this Saturday, ”said Tuttle.
Updates to the listing process are just a few of the changes that could be made to the New York Stock Exchange. The 228-year-old organization, based on Wall Street, continued to act virtually via digital platforms during the COVID-19 outbreak.
The pandemic could cause the NYSE to become less of a work from an office unit and more of a remote work from home in the future, Tuttle told theinformationsuperhighway in April.