Yesterday, the NYSE alerted listed companies that amendments to its requirements for public announcements will become operative on September 28, 2015. The changes to Section 202.06 of the listed company manual (available here) extend the time periods requiring prior notice to the NYSE of material news announcements, expand the circumstances when trading can be halted and effect certain other changes. A copy of the NYSE’s email alert is available here. Listed companies should adjust their procedures for disclosure of material news to comply with the new requirements.
Expansion of Time Period for Prior Notice to NYSE. Currently, companies must notify the NYSE Market Watch Group at least ten minutes before releasing material news if the release will occur shortly before opening or during trading hours. Beginning on September 28, companies will need to notify the NYSE Market Watch Group in advance of any announcement between 7:00 a.m. and 4:00 p.m. Eastern Time. The NYSE believes the change is necessary to reduce the potential for volatility during pre-market trading on other markets as well as once trading opens on the Exchange.
Pre-Market Trading Halt at Company Request. The amendments will allow the NYSE to halt trading when the listed company informs the NYSE staff that it plans to make a material announcement between 7:00 a.m. and 9:30 a.m. Eastern time and requests the halt pending release of the news. Because of lower trading volumes during pre-market hours, the NYSE believes listed companies are in the best position to determine whether a trading halt is appropriate given the nature of the news release.
Trading Halt Pending Requested Information. Currently, the NYSE’s authority to halt trading under the news release provisions of the listed company manual is limited to situations involving news announcements during market hours. The amendments will permit the NYSE to halt trading if it is necessary to request information from a listed company relating to material news, its compliance with continued listing requirements or any other information which is necessary to protect investors and the public interest, until the NYSE has received and evaluated such information.
Post-Market Announcements. To reduce the potential for discrepancies between the NYSE closing price and trading prices on other markets, the NYSE requests that listed companies intending to release material news after market close wait until the earlier of the publication of the official closing price on the NYSE or 15 minutes after the scheduled closing time – typically 4:00 p.m. Eastern time, except that on certain days trading closes early at 1:00 p.m. Eastern time.
Methods to Release Material News. The NYSE has simplified its advisory statement regarding permissible methods for listed companies to release material news to cover (1) inclusion of the news in a Form 8-K or other SEC filing or (2) issuance of the news in a press release to the major news wire services, including, at a minimum, Dow Jones & Company, Reuters Economic Services and Bloomberg Business News.
Although these amendments will become effective, the SEC may for a limited period temporarily suspend the rule change if believed to be in the public interest.