On February 19, the SEC approved amendments to the New York Stock Exchange Listed Company Manual to require foreign private issuers listed on the NYSE to submit to the SEC semi-annual unaudited financial information on Form 6-K. U.S. domestic issuers are required to file with the SEC quarterly reports on Form 10-Q containing unaudited quarterly financial information after the end of each of their first three fiscal quarters. Until the new rule changes, NYSE-listed foreign private issuers were not subject to express interim financial disclosure requirements. The amendments align the NYSE’s approach to this aspect of financial disclosure by foreign private issuers with the requirements of the Nasdaq Stock Market set forth in Rule 5250(c)(2) of its marketplace rules.

The SEC announced the amendments in Release No. 34-77198, which is available here, and made the amendments effective retroactively to the date on which the NYSE submitted them to the SEC (February 5). The amendments are open to public comment and possible (but unlikely) temporary suspension by the SEC within 60 days after their filing with the SEC on February 5 if the SEC believes suspension is in the public interest.

Background

The NYSE noted in its SEC submission that many foreign private issuers already publish interim financial information on at least a semi-annual basis. This information generally is furnished to the SEC on Form 6-K on the basis of General Instruction B to the form, which requires disclosure of information that a foreign private issuer (1) makes or is required to make public pursuant to the law of the jurisdiction of its domicile or in which it is incorporated or organized, (2) files or is required to file with a stock exchange on which its securities are traded and which was made public by that exchange or (3) distributes or is required to distribute to its security holders.

The NYSE expressed the view in its amendment proposal that access to interim financial information is “essential for the protection of investors, as annual financial disclosure is too infrequent to enable investors to make informed investment decisions, especially as the information ages in the latter part of the disclosure cycle.” The exchange consequently has moved to make disclosure of interim financial information uniformly applicable to all NYSE-listed foreign private issuers.

New reporting requirement

New Section 203.03 of the NYSE Listed Company Manual requires a listed foreign private issuer to submit the following financial information to the SEC on Form 6-K no later than six months after the end of its second fiscal quarter:

  • an interim balance sheet as of the end of its second fiscal quarter; and
  • a semi-annual income statement covering its first two fiscal quarters.

The information must be presented in English, but does not have to be audited or reconciled to U.S. generally accepted accounting principles (U.S. GAAP).

The amendments apply with respect to each fiscal year beginning on or after July 1, 2015. For a foreign private issuer with a fiscal year that ended on June 30, 2015, the first interim fiscal period for which it must submit financial information on Form 6-K is the six-month period that ended on December 31, 2015 (which it would have to submit by June 30, 2016). Any failure by a foreign private issuer to submit interim financial information on Form 6-K in a timely manner would constitute a “Late Filing Delinquency” under Section 802.01E of the NYSE Listed Company Manual, which, subject to a six-month cure period (subject to extension for another six months at the NYSE’s discretion), could result in the issuer’s delisting.

The amendments do not alter a foreign private issuer’s current Form 6-K disclosure obligations relating to information it is required to disclose under General Instruction B of that form. In some cases, these requirements could require more expansive or frequent financial disclosure than that mandated by the amendments.

The NYSE also has amended Section 103.00 of the NYSE Listed Company Manual to clarify that all NYSE-listed foreign private issuers must comply with the new interim financial disclosure requirements regardless of language in that Section allowing those issuers to follow home-country practice rather than NYSE requirements.