The NASDAQ Stock Market, Inc. (“NASDAQ”) requires its listed companies to notify the NASDAQ MarketWatch Department (“MarketWatch”) at least 10 minutes before the release of material news between the hours of 7:00 am and 8:00 pm ET. If the public release of material news is outside the hours of 7:00 am to 8:00 pm ET, the listed company must notify MarketWatch prior to 6:50 am ET. Recently, NASDAQ released Issuer Alert 2015-0011 (the “Alert”), with guidance for its listed companies regarding the release of material news around 4:00 pm ET, when the market closes. The Alert states that listed companies releasing material news after the close of market should wait until at least 4:01 pm ET, and preferably until 4:05 pm ET, before releasing the material news.
NASDAQ issued the Alert to its listed companies since the closing cross calculation starts at 4:00 pm ET, when trading ceases for the day and the dissemination of the resulting closing price takes place shortly thereafter, but generally before 4:01 pm ET. NASDAQ stated that releasing material news between 4:00 pm ET and 4:01 pm ET increases the potential for a sudden change in the closing price and may also contribute to price dislocation between different market venues. To provide the maximum opportunity for the closing price to be fully disseminated before the release of news, NASDAQ advised listed companies that they should wait until at least 4:05 pm ET to release the material news. Similarly, the New York Stock Exchange (“NYSE”) asks its listed companies to wait until the earlier of (i) the publication of their security’s official closing price on the NYSE or (ii) 15 minutes after the scheduled closing time of the NYSE.
Additionally, in the Alert, NASDAQ reminded its listed companies that changing dates regarding the release of earnings announcements, dividend record dates and dividend payment dates could be considered material news due to the potential impact on the price of a listed company’s securities, options and other derivative securities based on the price of the listed security.