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703.05 Preferred Stock Offerings Listing Process

(A) Listing Policy

The Exchange has not set any minimum numerical criteria for the listing of preferred stock. The issue must be of sufficient size and distribution, however, to warrant trading in the Exchange market system. The Exchange has set certain numerical delisting criteria for preferred stock. The Exchange will normally give consideration to suspending or removing a preferred stock if the aggregate market value of publicly-held shares is less than $2,000,000 and the number of publicly-held shares is less than 100,000.

The Exchange expects that a preferred stock will have voting provisions and other provisions normally found in a security designated as preferred stock. (See Para. 313.00 (C), "Preferred Stock, Minimum Voting Rights Required".) While the minimum redemption rights set forth below are acceptable under Exchange policy, they should not be regarded as an expression of opinion by the Exchange as to the adequacy of protective provisions under all circumstances.

The Exchange is concerned about the issuance of preferred stock which by its terms would vote separately as a class from the common stock on the approval of mergers and acquisitions, unless required by law. (See "Defensive Tactics" in Para. 308.00.)

(B) Clearance of Terms

Before a company applies for the listing of a preferred stock, it should first submit the terms of the preferred stock to the Exchange for clearance. In order to be called preference or preferred stock, the issue should be preferred as to dividends and on liquidation. After the terms have been reviewed and cleared by the Exchange, the company will be given permission to use a "listing intention statement" in the offering prospectus.

(C) Title of Issue

The Exchange recommends that the following attributes of the preferred stock be disclosed in the title of issue even if the preferred stock is not listed:

•The dividend rate should be shown.

•The seniority of the security in relation to other preferred issues should be indicated.

•If dividends are non-cumulative, the title should indicate it.

•If an issue is convertible for life, the title should indicate it. If there is a limitation on the conversion feature, it should be shown parenthetically.

•If the issue is one series of a class of preferred stock, the title should indicate it.

(D) Redemption Rights

The following describes the redemption rights of preferred shareholders.


•Redemption provisions should provide for a redemption date which is no less than 30 days nor more than 90 days following notification to holders.

•Rights of preferred shareholders may be terminated in advance of the redemption date provided that adequate notice has been published that sufficient funds will be made available to shareholders within 90 days. No rights should be terminated, even if the redemption date has passed, if there is a default in funds available for redemption.

•If an issue is convertible, conversion privileges should continue for a reasonable period after the redemption notice is published.

•Partial redemption should be pro rata or by lot.

(E) Exceptions to Minimum Voting Rights

In the application of the policy relating to the above-stated minimum voting provisions for preferred stock, the Exchange may make exception in a case where the laws of the state of incorporation preclude, or make virtually impossible, the conferring of exclusive voting rights upon any particular class of stock.

Exception may also be made in cases where the preferred stock has provisions which, while not conforming exactly to the above-stated minimum provisions, give the stock the practical equivalent of those minimum provisions.

Exception may also be made in a case where the company agrees to submit to its stockholders at a reasonably early date, a proposal to amend the voting provisions of the preferred stock to conform, at the least, to the minimum provisions stated above, along with the management's recommendation to stockholders that the proposal be adopted.

However, such exceptions are made only after consideration of the circumstances of the particular case, and it should not be assumed, in any case, that they will be made. Any company contemplating issuance of a preferred stock which it desires to list on the Exchange, and which, for any reason, does not have, at the least, the voting provisions described above, is urged to discuss the matter with the company's Exchange representative at an early date and, if at all possible, before definitive steps are taken to fix the provisions of the class.

(F) Filing a Listing Application Relating to Preferred Stock Offerings

The general instructions for preparation and filing of a listing application are described in Para. 703.01. The form of listing application and information regarding supporting documents required in connection with the listing application for preferred stock are available on the Exchange's website or from the Exchange upon request.

Amended: August 15, 2013 (NYSE-2013-33).