Alert January 18, 2018

NYSE Dividend Notification Changes Effective February 1

Summary

On February 1, 2018, the amendments to the New York Stock Exchange Listed Company Manual adopted in August 2017 become effective. These amendments will require listed companies to notify the NYSE at least 10 minutes before a company announces any dividend or stock distribution or the fixing of a record date for any dividend or stock distribution, even if the announcement is made outside of market hours.

As we have previously described, the NYSE amended Sections 204.12 and 204.21 of its Listed Company Manual in August 2017. The NYSE subsequently delayed implementation of these amendments until not later than February 1, 2018. The NYSE has announced that these amendments will become effective on February 1, 2018, consistent with its prior announcement.

The amendments to Sections 204.12 and 204.21 of the Listed Company Manual will require listed companies to provide notification to the NYSE at least 10 minutes before any public announcement of any action relating to a dividend or stock distribution on a listed stock, including the fixing of a record date for such a dividend or stock distribution. Previously, the NYSE had required notification no later than the time of the public announcement.

These notification requirements are separate from the requirement of Section 202.06 of the NYSE Listed Company Manual, which requires listed companies to provide notification at least 10 minutes in advance of any announcement of material news that is released between 7:00 AM ET and 4:00 PM ET. To this end, the NYSE has also amended Section 202.06 to explicitly state that listed companies must continue to comply with the procedures in Section 202.06 for all public announcements that relate to a dividend or stock distribution that are released between 7:00 AM ET and 4:00 PM ET.

The NYSE amended these notice requirements to enable it to ensure that a listed company’s proposed dividend schedule complies with applicable NYSE requirements before a listed company makes any public announcement with respect to a dividend or distribution on a listed stock, including the requirement to provide 10 days of advance notice of a record date. The NYSE has indicated that it will have staff available at all times to review dividend notifications immediately upon receipt, regardless of what time or day of the week the company provides this notification, and the NYSE will contact a listed company immediately if it identifies a problem with the notification.

In an earlier email to listed companies, the NYSE stated that, in contrast to the requirement that listed companies obtain NYSE approval before issuance of an announcement related to a dividend or stock distribution or a related record date during market hours, listed companies are not required to wait for NYSE approval before issuing such announcements outside of market hours as long as the company provides the required notice to the NYSE at least 10 minutes before public dissemination.

The NYSE proposal is available on the NYSE website, and the SEC notice of the proposed rule change (including the text of the proposed rule change) and the SEC order approving the rule change are available on the SEC website.

What Should Listed Companies Do?

If they have not already done so, NYSE-listed companies should review and revise their procedures for announcements of dividends and stock distributions to ensure compliance with these new advanced notice requirements.