On the heels of the NYSE rule amendment related to material news and trading halts (see this PubCo post ), as noted in thecorporatecounsel.net blog, Nasdaq has followed suit with this Issuer Alert. The Alert does not reflect a rule change, but does provide guidance regarding the issuance of material news releases around market close at 4:00 pm ET.
If companies plan to release material news between 7:00 am and 8:00 pm ET, they must notify Nasdaq MarketWatch in advance through Nasdaq’s disclosure submission system. If companies prefer to release material information after the close of the regular market at 4:00 pm ET, Nasdaq urges companies to wait until at least 4:01 pm ET, after the Nasdaq closing cross has been calculated, and preferably until 4:05 pm ET. The reason? The dissemination of the closing price usually occurs after the close and before 4:01 pm ET, and release of material news during this timeframe could result in a sudden change in the closing price, price dislocation between market venues and investor confusion. As a result, Nasdaq recommends that issuers “not release material news between 4:00 pm and 4:01 pm ET, unless there are specific circumstances where the company needs to act immediately.” To be safe, it’s best to wait until 4:05 pm ET.
Nasdaq also reminds issuers that changes to the dates of a company’s earnings release, dividend record or dividend payment may be material information that should be promptly disclosed to the public using a Reg FD-compliant method. In addition, MarketWatch must be notified in advance.