The New York Stock Exchange (NYSE) has changed its rules governing the manner in which listed companies must timely release material information to the public. A listed company can now comply with the NYSE timely release requirement by any method that would be in compliance with the U.S. Securities and Exchange Commission’s (SEC’s) Regulation FD, which proscribes the selective disclosure of nonpublic material information. Before the change, Section 202.06 of the NYSE Listed Company Manual required that listed companies comply with the exchange’s timely release policy by issuing a press release. The Nasdaq Stock Market made a similar change to its disclosure rules several years ago.
The rule change becomes operative on May 7, 2009. Although the change is subject to a comment period and possible abrogation within 60 days if the SEC finds that is necessary for the protection of investors, such action by the SEC for this type of rule change is rare and not expected in this case. The SEC notice of the NYSE filing and immediate effectiveness, dated April 27, 2009, is available here.
Regulation FD compliant methods of disclosure include the filing of a Current Report on Form 8-K or any other method of disclosure that is reasonably designed to provide broad, non-exclusionary distribution of the information to the public, including conference calls, press conferences and webcasts, so long as the public is provided adequate notice and granted access. The rule change is consistent with recent SEC interpretative guidance on how companies might use their websites in a manner the complies with Regulation FD.
The NYSE disclosure rules were also amended to require a listed company to notify its NYSE representative by e-mail at least 10 minutes prior to the release of an announcement of news of a material event or a statement dealing with a rumor. Previously this was only a recommendation. In doing so, companies will be required to advise the NYSE of the substance of the announcement, including any written statements to be included in the public announcement and which Regulation FD-compliant method the company intends to use.