The New York Stock Exchange caved into mounting pressure yesterday, announcing it would abandon a long-standing rule that has been attacked by regulators as anticompetitive.
The board of the New York Stock Exchange voted yesterday to repeal Rule 390, which kept investors from trading in blue-chip stocks anywhere but on the Big Board.
In doing so, the NYSE may be setting itself up for faster approval of its own initial public offering plans.
Arthur Levitt, chairman of the Securities and Exchange Commission, recently told The Post the rule would be gone soon one way or another. Several legislators also vowed to keep the pressure on NYSE until it eliminated the rule, even if that meant blocking any IPO proposal.
Senate Banking Committee Chairman Phil Gramm lauded the NYSE board yesterday as soon as the results of the vote were made public.
“The New York Stock Exchange was right to do a 180 on 390,” Gramm said. “This move will go a long way toward improving competition and public participation in our markets.”
Repeal of the controversial rule “should remove any doubt that the New York Stock Exchange is fully prepared to become a responsible and responsive public corporation,” Gramm added in a direct allusion to the NYSE’s IPO plans.
The Texas Republican also praised the NYSE board for making the change voluntarily, saying that shows markets “will work if we just let them.”
Under the now-discontinued Rule 390, brokers and investors were prohibited from trading stocks of any company that had listed with the NYSE before 1979 anyplace but at the NYSE.
Companies that listed with the NYSE that long ago include many of the best-known blue-chip names, including IBM and GE.
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Different version in the metro