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.
Note also that this is another installment in NYSE’s ongoing tinkering with its market notification rules. For example:
- An August 2017 rule change requires listed companies to give notice to NYSE’s Market Watch team at least 10 minutes prior to – rather than simultaneously with – making any public announcement, including announcements made outside of normal trading hours (9:30 a.m. to 4:00 p.m. Eastern time), regarding (a) dividend or stock distributions, and (b) the fixing of a dividend or stock distribution record date.
- In September 2015, NYSE amended its rules to require companies to notify it at least 10 minutes prior to a material news release between 7 a.m. and 9:30 a.m., though 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.)
Companies should check whether their news release procedures comply with these NYSE listing requirements.
All the best,