Alert September 25, 2017

NYSE Proposes Change in Material News Releases After Closing

Summary

The New York Stock Exchange has filed a proposal that will prohibit listed companies from issuing material news after the close of trading (generally 4:00 p.m. Eastern Time) until the earlier of the publication of the company’s official NYSE closing price or five minutes after the close of trading.

In 2015, the NYSE amended Section 202.06 of the NYSE Listed Company Manual to include advisory text requesting that listed companies wait to release material news after the close of trading (generally 4:00 p.m. Eastern Time) until the earlier of the publication of the company’s official closing price on the NYSE or 15 minutes after the close of trading. The delay was intended to avoid investor confusion in cases where trading on other markets continued after the close of trading on the NYSE, and information released by a company after the close of trading on the NYSE caused differences between the NYSE closing price and trading prices on other markets. Notwithstanding the advisory text in Section 202.06, the NYSE has indicated that it continues to experience situations where material news released shortly after 4:00 p.m. has resulted in investor confusion.

To address this situation, the NYSE has now filed a proposal to amend Section 202.06 of the Listed Company Manual to prohibit listed companies from issuing material news after the official closing time for the NYSE’s trading session until the earlier of the publication of the company’s official closing price on the NYSE or five minutes after the official NYSE closing time.

To avoid pricing disruptions when the NYSE closing auction is delayed more than five minutes, Section 202.06 as amended will continue to include advisory text requesting that companies avoid issuing material news until the earlier of the publication of the official NYSE closing price or 15 minutes after the NYSE’s official closing time. The text of Section 202.06 showing changes from the current version of the rule is available on the Securities and Exchange Commission website.

Companies should note that during trading hours (generally between 7:00 AM ET and 4:00 PM ET) Section 202.06 of the NYSE Listed Company Manual will continue to require listed companies to provide notification at least 10 minutes in advance of any announcement of material news in order to determine whether trading in the company’s securities should be temporarily halted.

The NYSE proposal requires approval by the SEC and is subject to public comment until September 26, 2017.