NYSE tightens its procedures for disclosure regarding material news announcements

Scheduled to be effective September 26, 2015, the NYSE has modified its regulations on the release of material news, amending Section 202.06 of the NYSE Listed Company Manual related to material news and trading halts.

Of keen interest to shareholder communicators are these three new amendments:

  • Pre-market notice
  • Post-closing announcements
  • Methods of releasing material news

Collaterally, the proposal makes the following changes that grant the NYSE the authority to halt trading:

  • During pre-market hours at the request of a listed company
  • When the NYSE requests certain, more clarifying information from an issuer
  • When an NYSE issuer is dual-listed, including as an DR (Depository Receipt), and that other exchange halts trading for its own regulatory motives

Pre-market notice 

Section 202.06 of the NYSE Listed Company Manual requires that issuers alert the NYSE preceding the release of material news to the market. This alert – generally the providing of an upcoming news release – is a “heads-up” for the NYSE to evaluate the information and to provide sufficient per-market time and opportunity to halt trading in the company’s securities, if necessary.

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The current version of 202.06 requires companies to provide ten minutes in advance of the release of material news, if the news is scheduled for release during the market hours of 9:30 am and 4:00 pm ET.

For pre-market material disclosures, currently the NYSE requires to be alerted “shortly before” the opening of trading, between 9:00 and 9:30 am ET.  According to the NYSE, most issuers release their material news between 7:00 am and 9:30 am, which, more and more, has the potential to influence pre-market trading on non-USA exchanges as well as on the NYSE itself upon that morning’s opening.

The new amendments expand the pre-market timeframe to begin at 7:00 am ET plus combine that timeframe and the trading hours into one “material” time block. Consequently, following the new amendments, NYSE-listed companies will be required to notify the NYSE at least ten minutes before the release of material news anytime between the hours of 7:00 am and 4:00 pm ET.

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Post-closing announcements

The amendments update the NYSE guidance regarding the release of material news after the close of trading. Specifically, the guidance states that companies should delay releasing material news until the earlier of either the publication of their security’s official closing price on the NYSE or fifteen minutes after the close of trading at 4:00 pm. This is to avoid interfering with the NYSE’s complete closing procedure.

Methods of releasing material news

The amendments update the methods set forth in Section 202.06(C) for releasing material news, which is outdated ie: stating telephone, fax and hand-delivery are acceptable means for disclosure.

Consistent with current synchronized disclosure practices (RegFD-ish), listed companies will be required to either 1.) include the news in a Form 8-K or other appropriate SEC filing or 2.) issue the material news in a news release to reach, at a minimum, Dow Jones, Reuters and Bloomberg Business News.

The changes to the NYSE Listed Company Manual is available in Exhibit 5 of the NYSE filing. (click here)

As always, we’re pleased to work alongside the NYSE to support all issuers with our Best Practices expertise and solutions to streamline the disclosure process for EDGAR filing and news distribution to help mitigate disclosure risk.

2 responses to “NYSE tightens its procedures for disclosure regarding material news announcements

  1. Good to know!

  2. Pingback: NYSE’s Tightened Disclosure Procedures and Their Impact On Communicators - News Aggregator

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