The Securities and Exchange Commission (SEC) has approved a rule change by the New York Stock Exchange (NYSE) that restricts certain companies from using reverse stock splits to continue being listed on the exchange. This new rule targets companies that repeatedly use reverse stock splits, especially if they have done so in the past year or have a significant reverse split history in the last two years. The SEC believes this rule will help protect investors by ensuring that companies listed on the exchange are financially stable and suitable for continuing public trading. Companies can still appeal if they are delisted due to these new rules.
Simple Explanation
The SEC has decided that some companies can't keep using a trick called "reverse stock splits" too many times just to stay in the NYSE club because they want to make sure these companies are strong enough to be trusted with people’s money. If a company thinks this decision is not fair, it can try to talk it over and maybe get back on the list.