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On August 13, 2026, the SEC filed notice of a new rule proposal by the New York Stock Exchange (NYSE or the Exchange) to extend the transition period for newly public companies to have in place an internal audit function from one year after listing to five years from that date.
In articulating the purpose of the proposed rule, the NYSE cites concerns newly public companies have raised about competing business and regulatory obligations that require management’s attention and the challenges of building an internal audit function to assess a company’s internal control environment while a company is still in its early stages and continuing to grow. To address those concerns while maintaining its view that having a robust internal audit function is a key component of sound corporate governance, the NYSE proposes to retain the requirement but provide issuers with up to five years to establish the function. If approved, the proposal would give newly listed NYSE companies substantially more time to build an internal audit function while they address other post-IPO governance and compliance obligations.
The proposed rule is subject to SEC approval within 45 days after publication in the Federal Register, unless that period is extended to as much as 90 days. The SEC is also accepting public comments at www.sec.gov/rules/sro.shtml or by mailing written comments to the SEC.
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