NYSE and Nasdaq Think Small []

Forbes ^ | 7/1/2009 | Alexandra Zendrian

[bruinbirdman]

Two big exchanges are courting ever smaller clients. Is this the return of the Amex?

In an attempt to gain and hang onto new listings in this rough market, two major exchanges have made some concessions to the economy either temporarily lowering listing standards or offering services to tiny, private companies.

NYSE Euronext is lowering its standards for stocks that can trade on the exchange, extending its temporary suspension of the $1 minimum stock price until the end of July. It is also trying to permanently have a $15 million minimum 30 day average market capitalization standard for companies trading on the exchange. Currently, the exchange’s minimum market cap level is $25 million. Lowering these two standards allows companies whose stock prices and market caps have been lowered because of the past year’s volatility to continue to be traded on the exchange.

Those standards sound more typical of the American Stock Exchange, or NYSE Amex since the two exchanges merged last year. The Amex was once wrought with fraud and scandal -- though it was a pioneer in exchange traded funds, it was also known for playing host to small cap companies that some investors and market watchers felt lacked proper governance and oversight. As NYSE adjusts its own rules in order to keep listings (and listing fees) it seems like the recession is turning the Big Board into the Curb. A more generous interpretation, however, is that by keeping these stocks listed, the exchange is performing a service to the investment community -- many institutional investors can only hold stocks that trade on a registered exchange. By not delisting these smaller stocks, NYSE saves its clients from forced sales. AIG traded below the $1 threshold at one point and Citigroup came close, so widely held names are at issue