Alert September 23, 2015

NYSE Amends Rules for Release of Material News


The New York Stock Exchange has amended its Rule 202.06, which governs the procedures that listed companies must follow for the release of material information. The amendment will become operative on Sept. 28, 2015. Most importantly, the amendment extends to 7 a.m. Eastern Time the pre-market hours during which listed companies are required to notify the NYSE before releasing material news. The amendment also provides advisory guidance related to the release of material news after the close of trading on the NYSE, and makes changes and provides clarification to the suggested means for the public release of material news and the circumstances in which the NYSE may halt trading in listed securities (including American Depository Receipts (ADRs)). A copy of the rule, marked to show the amendment, is available as Exhibit 5 of NYSE File No. SR-2015-38 as filed with the Securities and Exchange Commission. Securities and Exchange Commission Release No. 34-75809 relating to the NYSE amendment is available on the SEC web site.

Changes to Notification Requirements

Notifications During Pre-Market Hours. Currently, Rule 202.06 requires listed companies to notify the NYSE at least 10 minutes before they release material news “shortly before the opening or during market hours,” which start at 9:30 a.m. (all times are Eastern). After the amendment becomes operative on September 28, 2015, listed companies will be required to notify the NYSE at least ten minutes before they release material news between 7 a.m. and 4 p.m. The existing requirement that listed companies provide the text of material written announcements to the NYSE electronically through web-based notification methods will remain unchanged.

Notifications After Market Close. The amendment includes an advisory from the NYSE requesting that listed companies delay the release of material news after the close of trading on the NYSE until the earlier of (i) publication of the company’s official closing price on the NYSE or (ii) 15 minutes after the close of trading on the NYSE. This request is intended to facilitate an orderly closing process to trading on the NYSE. The advisory does not require that listed companies delay the release of material news after the close of trading, so listed companies are not prohibited from releasing material news (such as the commencement of a securities offering) promptly after 4 p.m.

Clarification of the Means of Public Release

Rule 202.06, as amended, will continue to require that listed companies release material news to the public by the “fastest available means.” The amendment contains a concise statement that listed companies typically will be required either (i) to include the news in a Form 8-K or other SEC filing or (ii) to issue the news in a press release to major news wire services, including, at a minimum, Dow Jones & Company, Inc., Reuters Economic Services, and Bloomberg Business News. Listed companies that comply with current NYSE requirements should not need to change their practices for publicly releasing material information as a result of this clarification. The amendment also removes a variety of outdated references, such as references suggesting that telephone, fax, and hand delivery are acceptable means for listed companies to release material news under NYSE rules.

Changes to Trading Halts

Trading Halts During Pre-Market Hours. The amendment will allow the NYSE to institute a trading halt before the opening of trading for the release of material news, but only at the request of the listed company. The amendment will also allow the NYSE to temporarily halt trading to facilitate an orderly opening process, if it appears that the dissemination of material news will not be complete prior to the opening of trading on the NYSE. Upon the NYSE’s implementation of a trading halt, other national securities exchanges, some of which maintain trading hours starting as early as 4 a.m., will also halt trading in the listed company’s security. Nasdaq Stock Market Rule 4120(a)(1) includes similar provisions with respect to trading halts between the hours of 4 a.m. and 9:30 a.m.

Trading Halts During Market Hours. The amendment will also provide that if a listed company releases material information during NYSE trading hours, the NYSE may halt trading in a listed security and may request additional information from the company relating to (i) material news, (ii) the listed company’s compliance with NYSE continued listing requirements or (iii) any other information necessary to protect investors and the public interest. If the NYSE halts trading under these circumstances, it may continue the trading halt until it has received and evaluated the additional information provided by the company. Before the amendment, Rule 202.06 limited the NYSE’s authority to halt trading to situations in which a listed company intended to release material news during market hours. Nasdaq Stock Market Rule 4120(a)(5) is similar to this portion of Rule 202.06, as amended.

Trading Halts for ADRs. The amendment will permit the NYSE to halt trading in ADRs or other securities listed on the NYSE when an NYSE-listed security or the security underlying an ADR is listed on or registered with another national securities exchange or foreign exchange or market, and the national securities exchange or foreign exchange or market, or regulatory authority overseeing such exchange or market, halts trading in such security for regulatory reasons. Nasdaq Stock Market Rule 4120(a)(4) is similar to this portion of the amended rule.

Associate Matt Reardon contributed to the production of this alert.