The SEC has approved new rules for the NYSE, Amex, and Nasdaq stock markets that toughen the listing standards for companies going public through a reverse merger. Under the new rules, ... Nasdaq, NYSE, and NYSE Amex will impose more stringent listing requirements for companies that become public through a reverse merger.  Specifically, the new rules would prohibit a reverse merger company from applying to list until:

• The company has completed a one-year “seasoning period” by trading in the U.S. OTC market or on another regulated U.S. or foreign exchange following the reverse merger, and filed all required reports with the SEC, including audited financial statements.

• The company maintains 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.

• Under the rules, the reverse merger company generally would be exempt from these special requirements if it is listing in connection with a substantial firm commitment underwritten public offering, or the reverse merger occurred long ago so that at least 4 annual reports with audited financial information have been filed with the SEC.

Currently Requirements. Reverse merger companies like other operating companies can pay to be listed on an exchange, where investors then can purchase and sell shares of the company.  However, regulators and auditors have experienced greater difficulty obtaining reliable information from certain reverse merger companies - particularly those based overseas. Reverse mergers permit private companies, including those located outside the U.S., to access U.S. investors and markets by merging with an existing public shell company. SEC 2010 Initiative. In summer 2010, the SEC launched an initiative to determine whether certain companies with foreign operations - including those that were the product of reverse mergers - were accurately reporting their financial results, and to assess the quality of their audits.  In recent months, the SEC and the exchanges have suspended or halted trading in more than 35 companies based overseas because they lacked current and accurate information about their operations and finances - including a number of companies formed by reverse mergers. In June 2011, the SEC issued an investor bulletin warning investors about companies that engage in reverse mergers. For additional information, go to:   [SEC PR 11-235, 11/9/11]. Also go to rule filings and releases by the above exchanges:   [Amex Notice and Order]  ...  [NYSE Notice and Order]  ...  [NASDAQ Notice and Order]