Last week, the SEC voted to approve a new national securities exchange called The Green Impact Exchange (GIX). According to ESG Today,
“GIX aims to be the first national securities exchange in the U.S. dedicated to the emerging global green economy, listing companies that make binding commitments to set, implement, measure, and achieve sustainability goals, and to provide investors with transparency about their progress.”
An overview of how GIX will function is available here. This will eventually be published in the Federal Register. The full operating rules are here but they focus on technical securities exchange governance and compliance matters rather than what qualifies as a GIX company. Here is something important to know:
“GIX will not be a primary listing market for securities. However, under GIX’s rules, an issuer whose securities are, or at the time of listing on GIX will be, listed on another national securities exchange registered with the Commission pursuant to Section 6(a) of the Act (its ‘primary listing exchange’) may apply to also list those securities on the Exchange. An issuer whose securities are listed on GIX and another national securities exchange must at all times continue to be in good standing with its primary listing exchange.”
A prospective GIX company must also demonstrate that it has:
- A Market Value of Listed Securities of at least $50 million for 90 consecutive trading days prior to the date of the listing application;
- Stockholders’ equity of at least $4 million;
- A market value of Unrestricted Securities of at least $15 million;
- Net Income from continuing operations of $750,000 either in the most recently completed fiscal year, or in two of the three most recently completed fiscal years;
- Stockholders’ equity of at least $4 million; and
- A Market Value of Unrestricted Publicly Held Shares of at least $5 million.
I think this is good idea – it means a GIX-listed company must first and foremost be real and subject to general compliance, governance and accounting standards.
Amendment 2 of GIX’s application withdrew Exhibit H-5, the Green Governance Standards with “a set of listing standards that include corporate governance requirements related to a company’s climate and environmental commitments that may bear on an environmentally-focused investor’s decision to purchase or sell a particular company’s securities.” Perhaps I missed it but I couldn’t find a replacement or superseding exhibit. For now, I’m in the dark about the criteria GIX will use to assess a company’s “greenness”, “impact” or suitability to be listed in the GIX other than overall corporate governance.
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