Document ID: SEC-2018-0452-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American, LLC
Posted Date: 2018-03-19T04:00Z

[Federal Register Volume 83, Number 53 (Monday, March 19, 2018)]
[Notices]
[Pages 12054-12057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-05449]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82864; File No. SR-NYSEAMER-2018-07]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Amending the 
NYSE American Company Guide To Require That Listed Companies Provide 
Notice to the Exchange of Announcements of Dividends or Stock 
Distributions at Least Ten Minutes in Advance of Public Release

March 13, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on March 1, 2018, NYSE American LLC (the ``Exchange'' or 
``NYSE American'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE American Company Guide (the 
``Company Guide'') to (i) require that listed companies provide notice 
to the Exchange of announcements of dividends or stock distributions at 
least 10 minutes in advance of public release, (ii) clarify the 
application of the immediate release policy to dividends and stock 
distributions, and (iii) adopt a provision specifying how listed 
companies must provide required notifications to the Exchange.
    The proposed rule change is available on the Exchange's website at 
www.nyse.com, at the principal office of the Exchange, and at the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text

[[Page 12055]]

of those statements may be examined at the places specified in Item IV 
below. The Exchange has prepared summaries, set forth in sections A, B, 
and C below, of the most significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NYSE American LLC (``NYSE American'' or the ``Exchange'') proposes 
to amend the NYSE American Company Guide (the ``Company Guide'') to (i) 
require that listed companies provide notice to the Exchange of 
announcements of dividends and stock distributions at least 10 minutes 
in advance of public release, (ii) clarify the application of the 
immediate release policy to dividends and stock distributions, and 
(iii) adopt a provision specifying how listed companies must provide 
required notifications to the Exchange.
Advance Notice Requirements for Dividends and Stock Distributions
    Section 501 of the Company Guide currently requires listed 
companies to publicize and notify the Exchange immediately of any 
action taken in respect to the payment or non-payment of dividends. The 
Exchange proposes to amend Section 501 to require listed companies to 
provide notice to the Exchange at least 10 minutes before making any 
public announcement with respect to a dividend or stock distribution 
\4\ in all cases (including the omission or postponement of a dividend 
action at the customary time as well as the declaration of a dividend), 
including outside of the hours in which the Exchange's immediate 
release policy is in operation.\5\ The rule as revised will provide 
that such notice is in addition to immediate publicity, should be given 
as soon as possible after declaration (but in any event at least ten 
days in advance of the record date), and should be given to the 
Exchange in accordance with proposed Section 405 (as described below).
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    \4\ The Exchange proposes to expand Section 501 to encompass 
stock distributions as well as cash dividends. The Exchange believes 
it is appropriate to treat stock distributions the same as cash 
dividends for this purpose as they have a similar effect on the 
economic interests of the shareholders and the trading market for 
the shares. This approach mirrors the approach taken in the 
comparable provision in the NYSE Listed Company Manual.
    \5\ Pursuant to Section 401(a) of the Company Guide, listed 
companies must comply with the Exchange's immediate release policy 
between 7:00 a.m. and 4:00 p.m., Eastern Time.
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    The principal effect of this amendment is to require listed 
companies to provide 10 minutes advance notice to the Exchange with 
respect to a dividend or stock distribution announcement made at any 
time, rather than just during the hours of operation of the immediate 
release policy, as is currently the case. The amended policy would take 
effect as of April 1, 2018. A comparable amended dividend notification 
policy recently adopted by the New York Stock Exchange (``NYSE'') was 
implemented on February 1, 2018.\6\
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    \6\ See 82 FR 39485 (August 18, 2017); Securities Exchange Act 
Release No. 81393 (August 14, 2017) (SR-NYSE-2017-17). See also 82 
FR 42712 (September 11, 2017); Securities Exchange Act Release No. 
81531 (September 5, 2017) (SR-NYSE-2017-43) (delaying implementation 
of the amended NYSE dividend notice requirements).
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    The Exchange believes there are significant benefits to requiring 
listed companies to provide all announcements of dividends and stock 
distributions to the Exchange prior to their public dissemination. In 
particular, if the Exchange is provided dividend and stock distribution 
information prior to its public availability, Exchange staff will be 
able to address any issues that may arise in relation to any 
announcement of a dividend or stock distribution. The proposed advance 
notice requirement will enable Exchange staff to ensure that a listed 
company's proposed dividend or stock distribution schedule complies 
with applicable Exchange requirements, including the requirement to 
provide 10 days advanced notice of the record date, and that the 
company's disclosure of the application of the Exchange's ``ex''-
dividend trading policy will be accurate. The Exchange intends to have 
staff available at all times to review dividend and stock distribution 
notifications immediately upon receipt, regardless of what time or day 
of the week they are provided. The staff will contact a listed company 
immediately if there is a problem with its notification. Addressing 
problems with dividend and stock distribution notifications before they 
are issued publicly will avoid any confusion in the marketplace 
resulting from the dissemination of inaccurate information.
    The Exchange proposes amendments to Sections 503 and 504 to conform 
to the proposed revisions to Section 501. The proposed amendments to 
Section 503 would: (i) Specify that the company announcing a cash or 
stock dividend should comply with the notification requirements set 
forth in proposed Section 405 and proposed amended Section 501, as well 
as the immediate release policy set forth in proposed amended Sections 
401(a) and (b) (as described below); and (ii) delete the detailed 
discussion in that rule of the methods by which companies comply with 
the immediate release policy, as that discussion is made redundant by 
the cross-reference to Sections 401(a) and (b). The proposed amendments 
to Section 504 would specific that announcements with respect to non-
payment of dividends should be provided to the Exchange pursuant to 
Section 501 and issued to the public pursuant to the immediate release 
policy set forth in Sections 401 and 402 and that the notice and 
announcement should be in the form specified in Section 503.
Application of Immediate Release Policy to Dividends
    Section 401(a) of the Company Guide provides that a listed company 
is required to make immediate public disclosure of all material 
information concerning its affairs, except in unusual circumstances 
(referred to as the Exchange's ``immediate release policy''). When such 
disclosure is to be made between 7:00 a.m. and 4:00 p.m., Eastern Time, 
it is essential that the Exchange be notified at least ten minutes 
prior to the announcement. The Exchange proposes to add commentary to 
Section 401(a), to clarify that listed companies must comply with the 
notification procedures in Sections 401(a) and (b) with respect to all 
announcements relating to a dividend or stock distribution when such 
disclosure is to be made between 7:00 a.m. and 4:00 p.m., Eastern Time. 
The proposed commentary would also specify that listed companies must 
also comply with the notification requirements of proposed amended 
Section 501 with respect to all such announcements, including outside 
of the hours of operation of the immediate release policy.
Uniform Method for Providing Notifications to the Exchange
    The Exchange proposes to adopt as new Section 405 of the Company 
Guide a provision that will specify how listed companies must comply 
with rules requiring them to provide notifications to the Exchange, 
including under Section 501. This proposed provision is substantively 
the same as Section 204.00(A) of the NYSE Listed Company

[[Page 12056]]

Manual.\7\ At the time of initial adoption, Section 405 would only 
apply initially to notifications required under proposed amended 
Section 501.
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    \7\ See Securities Exchange Act Release No. 68635 (January 11, 
2013); 78 FR 3958 (January 17, 2013) (SR-NYSE-2012-54).
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    Under proposed Section 405, the company shall provide such notice 
via a web portal or email address specified by the Exchange on its 
website (and the Exchange shall promptly update and prominently display 
the applicable information on its website in the event that it ever 
changes), except in emergency situations, when notification may instead 
be provided by telephone and confirmed by facsimile as specified by the 
Exchange on its website. For purposes of Section 405, an emergency 
situation will include lack of computer or internet access; a technical 
problem on the systems of either the listed company or the Exchange; or 
an incompatibility between the systems of the listed company and the 
Exchange. Section 405 will remind listed companies that they must 
continue to use the Exchange's telephone alert procedures when 
notifying the Exchange of any material event or a statement dealing 
with a rumor which calls for immediate release under Section 401. If a 
rule containing a notification requirement does not specify that such 
requirement must be met by complying with the notification procedures 
set forth in Section 405, the company will be permitted to use the 
methods provided by Section 405 or any other reasonable method. Section 
405 will state that listed companies are encouraged to contact their 
Exchange representative if they have any questions about the 
appropriate method of providing notification under applicable Exchange 
rules.
    The purpose of proposed Section 405 is to clarify the methods by 
which listed companies must notify the Exchange when certain events 
occur. By creating a uniform method of notification by web portal or 
email for Exchange notification requirements, the Exchange may reduce 
the likelihood that companies make a mistake when trying to notify the 
Exchange of important events. In particular, timely notification with 
respect to dividends and other distributions is critical to allow 
investors time to make arrangements to be holders of a security by a 
certain date for a distribution or shareholder meeting. In such cases, 
it makes sense to require listed companies to give notice to the 
Exchange using current, efficient electronic methods that more easily 
lend themselves to accurate recordkeeping than manual or written 
methods.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with Section 6(b) \8\ of the Act, in general, and further the 
objectives of Section 6(b)(5) of the Act,\9\ in particular in that they 
are designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
and are not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed amendment to Section 501 of 
the Company Guide and the conforming amendments to Sections 503 and 504 
are consistent with the protection of investors and the public interest 
in accordance with Section 6(b)(5) of the Act in that the changes 
should allow Exchange staff to resolve any rule compliance issues with 
a listed company's dividend or stock distribution action prior its 
public announcement. By requiring listed companies to provide the 
Exchange dividend or stock distribution notices at least ten minutes 
prior to the public announcement of a distribution, irrespective of the 
time of day (rather than limited to the hours of 7:00 a.m. and 4:00 
p.m. as in the current rule), the Exchange should be able to address 
any concerns with the content of such notifications (including the ten 
day advance notice requirement), to ensure compliance with both 
Exchange and Commission rules, consistent with investor protection and 
the public interest. In addition, the proposed amendments are 
reasonably designed to reduce the possibility for investor confusion in 
the marketplace resulting from the dissemination of inaccurate or 
misleading dividend or stock distribution information.
    The Exchange believes that the proposed amendments to Section 
401(a) of the Company Guide are consistent with the Act in that they 
will provide transparency and clarity to listed companies on the 
application of the immediate news release policy to dividend or stock 
distribution announcements.
    The Exchange believes that the adoption of proposed Section 405 of 
the Company Guide is consistent with the protection of investors and 
the public interest in accordance with Section 6(b)(5) of the Act 
because it is intended to clarify the methods by which listed companies 
must notify the Exchange when certain events occur. By creating a 
uniform method of notification by web portal or email for Exchange 
notification requirements, the Exchange may reduce the likelihood that 
companies make a mistake when trying to notify the Exchange of 
important events. In particular, timely notification with respect to 
dividends and other distributions is critical to allow investors time 
to make arrangements to ensure that they are holders of a security on 
the record date for a distribution or shareholder meeting. In such 
cases, it makes sense to require listed companies to give notice to the 
Exchange using current, efficient electronic methods that more easily 
lend themselves to accurate recordkeeping than manual or written 
methods.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed amendments to the Company 
Guide do not impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed 
rule change does not affect competition in any way. Rather, the 
proposed rule changes will (i) enable the Exchange to be aware of all 
dividend announcements before they are made so that Exchange staff is 
appropriately informed to enable it to address any rule compliance 
problems with a listed company's dividend schedule before it is 
publicly announced and (ii) specify a uniform approach to providing 
notifications to the Exchange.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has

[[Page 12057]]

become effective pursuant to Section 19(b)(3)(A) of the Act \10\ and 
Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEAMER-2018-07 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEAMER-2018-07. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSEAMER-2018-07, and should be 
submitted on or before April 9, 2018.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-05449 Filed 3-16-18; 8:45 am]
 BILLING CODE 8011-01-P