NYSE Proposes to Require Electronic Submission of Notices to NYSE Through Web-Based Communication System

SUMMARY

The SEC has published for public comment proposed changes to the New York Stock Exchange Listed Company Manual that would require most notices to the NYSE by listed companies to be made electronically through egovdirect.com, the NYSE’s web portal, or by email, rather than by telephone, fax, telegram or otherwise. Notice of material corporate events or statements regarding rumors during or shortly before market hours would still require telephone notice to the NYSE at least ten minutes prior to release. Comments on the proposal are due by December 18, 2012.  

REQUIRED USE OF NYSE WEB-BASED COMMUNICATION SYSTEM

The NYSE proposes to modernize its Listed Company Manual by amending Section 204.00 to provide that, in most circumstances requiring notice to the NYSE, listed companies will be required to provide such notice via a web portal (presently expected to be egovdirect.com) or an email address specified by the NYSE on its website. Only in emergency situations (including lack of computer/internet access, a technical problem or incompatibility between the systems of the listed company and the NYSE) could companies instead provide these notifications by telephone, followed by facsimile confirmation.  

The new notice procedures of Section 204.00 would apply to the following types of notices required by the Listed Company Manual:

  • The fixing of a date for closing of the transfer books or taking of a record of shareholders for any purpose, under Sections 204.06, 204.21 and 401.02;
  • Dividend or distribution-related notices, under Section 204.12;
  • Setting a date for any shareholder meeting, under Section 401.02; and
  • Transfer agents’ notifications to the NYSE at the end of each calendar quarter of the number of shares of a company outstanding, under Section 601.00.

The revised Section 204.00 would also state that if a rule containing a notification requirement does not specify how such requirement should be met, a company could then provide notice in accordance with the methods provided by Section 204.00 or through any other reasonable method.  

The NYSE believes that this uniform web-based method of communication will help ensure that notices are received and managed in an efficient manner and will generally be more reliable than the existing methods of notification for these items, which include notices by telegram, telephone, or facsimile.  

VERBAL NOTIFICATION FOR DISCLOSURE OF MATERIAL CORPORATE DEVELOPMENTS

The proposed changes would provide that if a listed company discloses material corporate developments or issues a statement addressing a rumor between 9:00 a.m. and 5:00 p.m. EST, the NYSE will continue to require (under Section 202.06 of its Listed Company Manual) that the company provide to the NYSE:

  • verbal notification by telephone at least 10 minutes prior to the public release of the information; and
  • a copy of the text of the announcement via the web-based notification methods specified in Section 204.00, at least 10 minutes prior to release of the information.  

In addition, the NYSE proposes to clarify that in the event of a redemption of a listed security, the company must follow the same timely alert procedures under Section 202.06 (i.e., by telephone, followed by web-based transmission of the text of the notice, in accordance with proposed Section 204.00) by deleting an outdated reference to hand delivery at the end of Section 311.01.  

DELIVERY OF PRINTED PROXY STATEMENTS

The proposed revisions would continue to require companies to provide the NYSE with definitive copies of proxy materials (including the proxy card) no later than the date that the material is sent or given to shareholders, but would reduce the number of copies needed from six to three (consistent with the requirements of Rule 14a-6(b) under the Securities Exchange Act of 1934).