On June 21, 2013, the NYSE proposed a rule change that would amend Section 312.07 of its Listed Company Manual, which establishes voting requirements for proposals requiring shareholder approval under NYSE rules. Currently, Section 312.07 imposes voting requirements for shareholder meeting proposals where shareholder approval is a prerequisite to listing any additional or new securities. It requires approval by the majority of votes cast, provided the total votes cast represent over 50% of all securities entitled to vote on the proposal. The proposed rule change would remove from Section 312.07 the qualification that the total votes cast must represent over 50% of all securities entitled to vote.

The NYSE noted in the proposed rule that, because the corporate law of each state may impose its own voting requirements and companies' by-laws or other governing documents often include more stringent voting requirements than those imposed by state law, the quorum requirement in Section 312.07 is unnecessary. The requirement can also be confusing to companies and shareholders because it requires companies to disclose and apply two separate voting standards to one type of proposal, while applying only the requirements of governing documents or state law to all other proposals. The removal of the quorum requirement would also conform the NYSE's rules to those of NASDAQ and NYSE MKT LLC.

In April 2013, the NYSE proposed a rule change that was subsequently withdrawn that would have removed Section 312.07 in its entirety (see Legal Update, NYSE Proposed Removal of Voting Requirements for Proposals Requiring Shareholder Approval to Issue Securities).

To learn more about NYSE shareholder approval requirements, see Practice Note, NYSE 20% Rule: Stockholder Approval Requirements for Securities Offerings.