NYSE's immediate release policy allows use of any FD-compliant method

By Cydney Posner

The SEC has recently approved an NYSE proposal to allow NYSE-listed companies to comply with the NYSE's immediate release policy by disseminating information by any Reg FD-compliant method (or combination of methods), and the rule changes have now become effective.

Section 202.05 of the Listed Company Manual requires a listed company to release quickly to the public any news or information that might reasonably be expected to materially affect the market for its securities. Previously, Section 202.06 provided that companies should comply with the immediate release policy by issuing press releases. Now, although the NYSE continues to encourage listed companies to comply with the immediate release policy by issuing press releases, companies will be able to comply by other FD-compliant methods designed to provide broad, non-exclusionary distribution of the information to the public. These methods may include, for example, filing an 8-K with the SEC, issuing a broadly disseminated press release, or holding a conference call, press conference or webcast, so long as the public is provided adequate notice (generally by press release) and granted access. (In addition, some companies may be able to publicize material news through the company website in compliance with the recent guidance by the SEC under circumstances where that approach may be appropriate.)

In addition, the SEC has approved an amendment to Section 202.06(B) of the Manual. That rule previously provided that, when the announcement of news of a material event or a statement dealing with a rumor that calls for immediate release is made shortly before the opening or during market hours (9:30 A.M. to 5:00 P.M., New York time), it is recommended that the company's NYSE representative be notified by telephone at least ten minutes prior to release of the announcement. This notification is intended to enable the NYSE to determine whether to impose a temporary trading halt. The amendment makes it clear that the notification to the NYSE is a requirement of the rule and not just a recommendation. In addition, the amendment to Section 202.06(B) requires the listed company, when contacting the NYSE, to disclose the substance of the announcement, identify the FD-compliant method it intends to use to disseminate the news and provide the NYSE with the information necessary to locate the information upon publication. The amendment also requires the company, when the announcement is in written form, to provide the text of the proposed announcement to the NYSE by email at the time it notifies the NYSE.

Section 202.06(C) has also been amended (i) to provide that public disclosures that may significantly affect trading should be provided to the NYSE by email rather than by fax (as is currently the case) and (ii) to conform to the change to Section 202.06(B), by providing that material news may be disseminated by any FD-compliant method and not just by press release.

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