US to heighten listing conditions for reverse merger cos

WASHINGTON, Nov 10 (Xinhua): The US Securities and Exchange Commission (SEC) Wednesday approved new rules for the three major US listing markets to toughen standards for companies going public through a reverse merger. Currently, reverse merger companies like other operating companies can pay to be listed on an exchange. However, in some cases, regulators and auditors have greater difficulty getting reliable information from merger companies, particularly those based overseas, noted the SEC. To prevent accounting fraud, Nasdaq, NYSE, and NYSE Amex proposed additional rules to impose more stringent listing requirements for companies that become public through a reverse merger. Under the new rules, a reverse merger company, applying to list, is required to complete a one-year "seasoning period" by trading in the US over-the-counter market or on another regulated US or foreign exchange following the reverse merger. In addition, the company has to maintain the requisite minimum share price for a sustained period, and for at least 30 of the 60 trading days, immediately prior to its listing application and the exchange's decision to list.