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The SEC Approves More Amendments to NYSE's Notice Requirements

    Client Alerts
  • August 22, 2017

Back in September 2015, the New York Stock Exchange amended the NYSE Listed Company Manual to:

  • expand the pre-market hours during which NYSE-listed companies must provide prior notice of material news,
  • expand the circumstances under which NYSE may halt trading, and
  • provide guidance related to the release of material news after the close of trading.

Then last week NYSE did it again, this time to require listed companies to give NYSE’s Market Watch team at least 10 minutes prior notice before making any public announcement, including announcements made outside of normal trading hours (9:30 a.m. to 4:00 p.m. Eastern time), regarding:

  • any dividend or stock distribution required by NYSE Listed Company Manual Section 204.12, and
  • the fixing of a dividend or stock distribution record date.

As a practical matter, this means that companies must now give NYSE notice of a dividend or stock distribution 10 minutes before the announcement, rather than simultaneously with the announcement, as before. The SEC deems this important because, among other things, the record date determines (a) when the stock will trade ex-dividend and (b) the requirements regarding brokers’ cutoff dates for determining full and fractional shares.

Requiring notice 10 minutes before such announcements regardless of the time of day (rather than just during normal trading hours) allows NYSE to address any concerns with the content of the announcement and reduce the possibility of investor confusion if the disseminated information is inaccurate or misleading.

The SEC noted in a footnote (perhaps hoping that NYSE’s staff wouldn’t notice) that NYSE Market Watch will be available “at all times” (day or night) to review the announcement and will contact the listed company “immediately” if there is a problem.

The amended rule became effective on August 14.

Other expanded market notification information.

The 2015 amendments included these pre-market and post-market rules and clarifications:

  • Companies must notify NYSE at least 10 minutes prior to a material news release between 7 a.m. and 9:30 a.m. (Section 202.06). However, because NYSE is not open for trading before 9:30 a.m., it will impose a pre-market trading halt only at the request of the company, rather than on its own initiative. (Trading halts during normal trading hours are at NYSE’s unilateral discretion.)
  • Because it can take several minutes to close a trade that occurred at the 4 p.m. closing price and because that same security can then be traded on another market, a material news release immediately following the market close can result in price and volume volatility that may confuse investors. NYSE advisory text to Section 202.06 requests, therefore, that listed companies wait until the earlier of publication of their security’s official closing price on NYSE or 15 minutes after NYSE’s closing time before releasing material news.