NYSE Texas Adopts Rule Establishing Limited Underwriting Members

NYSE Texas, Inc. adopted new rules to grant access to the exchange for the "limited purpose of performing underwriting activity as a principal underwriter," while enhancing oversight of the role underwriters play in company listings, and strengthening regulatory authority over such firms.

Article 3, Rule 20 creates a Limited Underwriting Member category with no trading privileges, limited to acting as a principal underwriter in connection with an initial listing.

The principal provisions of the new rules are as follows:

• Limited Underwriting Members must be registered broker-dealers and FINRA members in good standing, with a disciplinary history satisfactory to the Exchange. They are granted access solely to act as a principal underwriter for a company seeking to list on the Exchange and do not have trading privileges.
• The Exchange amended Article 22 ("Listed Securities"), Rule 1(b)(14) to define "principal underwriter" consistent with Securities Act Rule 405 ("Definitions of terms") and to require that any issuer applying for initial listing, in connection with a transaction involving an underwriter, engage a principal underwriter that is either an Exchange Participant/Participant Firm or a Limited Underwriting Member.
• Limited Underwriting Members are subject to a specific subset of Exchange rules deemed critical to the underwriting process, including rules governing supervision, adherence to law, business conduct standards prohibiting fraud and manipulation, disciplinary authority, and fee obligations.
• Because they lack trading privileges, Limited Underwriting Members are excluded from rules primarily related to trading activity and Exchange operations, including Order Audit Trail System and Consolidated Audit Trail requirements, as well as other trading and operational provisions not relevant to underwriting activity.

In addition, the rules include supplementary material clarifying that Limited Underwriting Members agree to be regulated by and are subject to the jurisdiction of the Exchange solely for purposes of interpreting and applying the specified applicable rules. NYSE Texas noted that these changes are substantially similar to frameworks previously adopted by the NYSE and Nasdaq.

The rule change was filed for immediate effectiveness on February 26, 2026, and will become operative 30 days following the effective date of a separate filing establishing fees for the new membership class.