NYSE suspends $1 rule

[Italkcash Newsfeed]

The New York Stock Exchange has decided to temporarily suspend a rule requiring that companies be kicked off the exchange when their shares fall below $1 for 30 consecutive days. With the stock market in free fall, many once proud companies have seen their shares dive into that bargain basement, and the NYSE has decided it doesn't want to add fuel to the fire by sending them off to Casino Pink Sheets.

The exchange also said that it would maintain its relaxed minimum market cap standard of $15 million -- down from the usual $25 million. Both new policies will be in effect until June 30th, unless they are renewed.

This new rule probably won't have too much effect on investors because most NYSE-traded companies that tank below $1 are probably headed to zero anyway -- companies like American International Group (NYSE: AIG). But the relaxed listing standards will give distressed issuers one less thing to worry about, even if it does come at the expense of the prestige of the NYSE.

The big question is: Will the NYSE really be able to follow through with its plan to restore heightened listing standards as soon as the beginning of July? If the market do not return as many as of right now 56 NYSE-listed companies will be kick of the exchange.