The SEC recently approved an amendment to NYSE’s Listed Company Manual prohibiting companies from issuing material news after NYSE closes for trading – 4:00 p.m. Eastern time on normal trading days – until the earlier of (a) publication of the company’s official closing price by NYSE and (b) five minutes after NYSE’s official closing time. An important exception permits companies to publicly disclose material information immediately following a non-intentional disclosure if necessary to comply with Regulation FD.
According to the SEC’s final rule release, the amendment is designed to address the fact that trading occurs after 4:00 p.m. Eastern time on other securities exchanges and non-exchange venues (known as “away markets”). Therefore, if a company issues material news before NYSE completes its trading process and posts the company’s closing price, there can be material differences between NYSE’s closing price and trading prices on away markets, potentially creating “significant investor confusion.”
As a practical matter, this means that NYSE-listed companies should wait at least five minutes before releasing news after the market closes in order to comply with the new rule. This is a change from the old advisory text to Section 202.06 of NYSE’s Listed Company Manual, which requested that listed companies wait until the earlier of publication of their security’s official closing price on NYSE and 15 minutes after NYSE’s closing time before releasing material news.