Document ID: SEC-2013-0097-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2013-01-17T05:00Z

[Federal Register Volume 78, Number 12 (Thursday, January 17, 2013)]
[Notices]
[Pages 3958-3960]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00876]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68635; File No. SR-NYSE-2012-54]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Granting Approval to Proposed Rule Change Amending the Listed Company 
Manual Section 204.00 To Create a Uniform Method for a Company To 
Provide Notice to the Exchange When Required Pursuant to Sections 
204.06, 204.12, 204.17, 204.21, 204.22, 311.01, 401.02, and 601.00 of 
the Listed Company Manual, and To Make Conforming Changes

January 11, 2013.

I. Introduction

    On November 8, 2012, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend Section 204.00 of the Listed Company 
Manual, which sets forth the required procedures that listed companies 
must follow to notify the Exchange upon the occurrence of certain 
events, and to amend related provisions of the Manual to make clear 
which provisions trigger the reporting procedures set forth in amended 
Section 204.00. The proposed rule changes were published for comment in 
the Federal Register on November 27, 2012.\3\ The Commission did not 
receive any comments on the proposed rule change. This order approves 
the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 68276 (November 20, 
2012), 77 FR 70868 (November 27, 2012) (``Notice'').
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II. Description of the Proposals

    Companies that list their securities on the Exchange are subject to 
a number of reporting requirements set forth in the Exchange's Listed 
Company Manual (``Manual''). The Exchange proposes to amend the methods 
by which listed companies give notice to the Exchange of matters or 
events where timely notification is essential to the ability of 
investors to arrange to be holders of a security by a certain date for 
a distribution or shareholder meeting. These events are: Closing of 
transfer books; notice of dividend action or action relating to a stock 
distribution; meetings of shareholders, notice of the fixing of a date 
for the taking of a record of shareholders or for the closing of 
transfer books; redemption of listed securities; notice of corporate 
action which will result in, or which looks toward, either the partial 
or full call for redemption of a listed security; notice of dates set 
in connection with the calling of any meeting of shareholders; and 
notice by transfer agents of the number of shares outstanding at the 
end of each calendar quarter.
    Currently, the Manual contains sections governing the notice that 
listed companies are required to provide the Exchange in case of each 
of these events; however, these sections set forth either different or 
no precise method for providing such notice. The following chart 
summarizes how these various notification provisions currently are 
addressed in the Manual.

------------------------------------------------------------------------
                Section                           Current method
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204.00 Notice to and Filings with the    Notice methods include fax,
 Exchange (notice in connection with      telephone, telegram, and
 certain actions or events as specified   letter.
 in Sections 204.01 through 204.25).
204.06 Closing of Transfer Books.......  No method specified.
204.12 Dividends and Stock               Notice methods include fax,
 Distributions (notice of dividend        telephone, telegram, and
 action or action relating to a stock     letter.
 distribution).
204.17 Meetings of Shareholders........  No method specified.
204.21 Record Date (notice of the        Notice methods include fax,
 fixing of a date for the taking of a     telephone, telegram, and
 record of shareholders or for the        letter.
 closing of transfer books).
204.22 Redemption of Listed Securities.  No method specified.
311.01 Publicity and Notice to the       Notice methods include fax and
 Exchange of Redemption (notice of        telephone.
 corporate action which will result in,
 or which looks toward, either the
 partial or full call for redemption of
 a listed security).
401.02 Notice to the Exchange (notice    Notice methods include
 of dates set in connection with the      telephone and writing or fax.
 calling of any meeting of
 shareholders, including changes in
 record date).
601.00 Services to be Provided by        Notice methods include fax and
 Transfer Agents and Registrars (notice   email.
 by transfer agents of the number of
 shares outstanding at the end of each
 calendar quarter).
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[[Page 3959]]

    The Exchange proposes to create a uniform method that listed 
companies will use to notify the Exchange of the events identified in 
the chart above. To do so, the Exchange proposes to set forth the new, 
uniform method of notification in Section 204.00, and to amend the 
remaining Sections in the chart above to include an explicit direction 
to listed companies to follow the amended notification procedures of 
Section 204.00.
    Specifically, the Exchange proposes to amend Section 204.00 \4\ to 
provide that, when a provision of the Listed Company Manual requires a 
company to give notice to the Exchange pursuant to Section 204.00, the 
company shall provide such notice through a web-based communication 
system--either a web portal or email address--specified by the Exchange 
in a prominent position on its Web site.\5\ Should the Exchange ever 
change the web-based communication system it uses to receive 
notifications pursuant to Section 204.00, the proposed text of Section 
204.00 would require the Exchange to promptly update and display the 
applicable information on its Web site.\6\
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    \4\ In addition to the proposed substantive amendments to 
Section 204.00 described in the text, the Exchange proposes to 
delete the word ``written'' from the heading for Section 204.00 and 
from the first sentence of the section. In its filing, the Exchange 
stated that this technical change is meant to eliminate any 
potential confusion as to whether notices provided through a web-
based communication system constitute ``written'' notices.
    \5\ The Exchange noted in its submission that if the filing is 
approved, it plans to commence receiving the web-based notifications 
pursuant to Section 204.00 through www.egovdirect, a web portal 
operated by the Exchange, or through an email address designated by 
the Exchange.
    \6\ Additionally, proposed Section 204.00 encourages listed 
companies to contact their Exchange representatives if they have any 
questions about the appropriate method of providing notification 
under applicable Exchange rules.
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    The Exchange also proposes to amend Section 204.00 to address 
several other scenarios that impact the notifications that companies 
must provide to the Exchange. First, the amended Section 204.00 would 
say that, in emergency situations--for instance, lack of computer or 
Internet access, technical problems at the Exchange or company, or 
incompatibility between Exchange and company systems--companies may 
provide notifications required pursuant to the Section by telephone and 
confirmed by facsimile, as specified by the Exchange on its Web 
site.\7\ Second, amended Section 204.00 would require that, in cases 
where a material event or a statement dealing with a rumor which calls 
for immediate release is made shortly before the opening or during 
market hours, companies must notify the Exchange using the telephone 
alert procedures set forth in Section 202.06(B) of the Manual.\8\ 
Finally, amended Section 204.00 would clarify that for the remaining 
notification provisions in the Manual that do not direct companies 
specifically to follow the Section's revised notification methods, 
companies may use the methods provided for in Section 204.00 or any 
other reasonable method.
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    \7\ Again, the Exchange notes that companies are encouraged to 
contact their Exchange representatives if they have any questions 
about how to comply with applicable notification requirements.
    \8\ The telephone alert procedures in Section 202.06(B) require 
that, when the announcement of news of a material event or a 
statement dealing with a rumor which calls for immediate release is 
made shortly before the opening or during market hours, a company 
must give notice to their Exchange representatives by telephone at 
least ten minutes prior to the release of the announcement. Section 
202.06(B) further requires that when such announcement is in written 
form, a company must also provide the text of such written 
announcement to the Exchange at least ten minutes prior to its 
release. The Exchange proposes to amend Section 202.06(B) to specify 
that companies should now use the web-based communication system 
specified in Section 204.00--i.e., the web portal or designated 
email address--to transmit the written form of the announcement.
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    The Exchange explained in its filing the reason why the remaining 
notification provisions contained in the Manual--the ones not specified 
in the chart above and subject to the proposed amendments--would not 
require companies to follow the notification methods set forth in 
204.00. According to the Exchange, these remaining provisions found in 
Sections 204.01 through 204.25 relate to matters about which the 
Exchange needs to be informed promptly, such as a change in transfer 
agent or trustee (Section 204.02) or change in auditors (Section 
204.03), but a company's failure to notify the Exchange immediately in 
the case of these events would not significantly disadvantage 
investors. As a result, the Exchange does not propose to amend these 
remaining provisions to require notification pursuant to 204.00; 
instead, the Exchange believes it is reasonable to afford listed 
companies more flexibility with respect to how they comply with the 
remaining notification provisions that do not specifically direct a 
company to Section 204.00.
    In connection with the proposed amendments to the notification 
methods prescribed in Section 204.00, the Exchange also proposes to 
revise the ``Guide to Requirements for Submitting Data to the 
Exchange'' (``Guide'') which appears in the Introduction to the Listed 
Company Manual.\9\ The Exchange proposes to amend the portion of the 
Guide summarizing the submission requirements relating to press 
releases disclosing material corporate events. This part of the Guide 
is meant to summarize the requirements of the telephone alert policy 
found in Section 202.06(B), but as it stands now, it states incorrectly 
that the text of certain written announcements should be conveyed to 
the Exchange after an announcement is released. The Exchange's proposed 
amendment to this portion of the Guide would conform the summary 
language used in the Guide to the language of the actual requirement 
found in Section 202.06(B), which states that the text of certain 
written announcements must be conveyed to the Exchange at least ten 
minutes prior to release.
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    \9\ In addition to the substantive changes to the Guide 
described in the text, the Exchange proposes to revise cross-
references contained in the Guide so that they refer to a 
``Section'' of the Manual rather than a ``Paragraph,'' as the Manual 
is organized in ``Sections,'' not ``Paragraphs.''
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    The Exchange also proposes several administrative changes to the 
Guide. First, it proposes to amend from six to three the number of 
copies of a proxy statement that a listed company must submit to the 
Exchange. The reason for the change is that the Exchange has determined 
that three copies of the proxy statement is sufficient for the 
Exchange's review purposes, and that the proposed amendment would 
lessen an administrative burden on listed companies. Second, the 
Exchange proposes to make changes to the portion of the Guide 
summarizing the notification requirements for shareholder meetings. The 
Exchange proposes to change the name of this Item in the Guide from 
``Shareholders' Meeting/Notice'' to ``Shareholders' Meeting/Notice of 
Record Date or Change of Record Date.'' The Exchange also proposes to 
revise the description of the ``Due Date'' for this Item in the Guide, 
by rewording the description to require notice ``[a]t least ten days in 
advance of record date,'' instead of ``[n]ot later than the tenth day 
prior to the record date.''
    Finally, the Exchange proposes to amend Section 311.01 to clarify 
what method of notification is required when a company's corporate 
action (or any action of which the company has knowledge) will result 
in, or looks toward, either the partial or full call for redemption of 
a listed security. Currently, Section 311.01 contains language in two 
different places setting forth methods of notification in cases of 
redemptions, and the language in these two places is potentially in 
conflict. In the first instance where Section 311.01

[[Page 3960]]

prescribes a method of notification, it says that companies must follow 
the timely disclosure/telephone alert procedures found in Sections 
202.05 and 202.06(B).\10\ Later in Section 311.01, there is a second 
notification directive that requires companies to notify the Exchange 
of redemptions in writing, delivered by hand if possible, and if 
immediate hand delivery is not possible, than the company must notify 
the Exchange of a redemption action by telephone, no later than 
simultaneously with the release of the information to the newspapers 
and news wire services, confirmed promptly by fax. The Exchange 
proposes to delete the paragraph containing the second directive. As a 
result of the proposed change, the only notification directive in 
Section 311.01 would be the first one that requires companies to follow 
the timely disclosure and telephone alert procedures.
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    \10\ The Exchange proposed several additional technical and non-
substantive changes to Section 311.01. See Notice, supra note 3.
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III. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it consistent with the requirements of the Act.\11\ 
Specifically, the Commission believes it is consistent with Section 
6(b)(5) of the Act,\12\ which requires, among other things, that the 
rules of a national securities exchange be designed to prevent 
fraudulent and manipulative acts and practices, 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.
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    \11\ 15 U.S.C. 78f. In approving this proposed rule change, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \12\ 15 U.S.C. 78f(b)(5).
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    The proposed changes are intended to simplify and clarify the 
provisions of the Manual relating to 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 
the Sections that specifically refer to Section 204.00, identified in 
the chart above, the Exchange may reduce the likelihood that companies 
make a mistake when trying to notify the Exchange of important events. 
As explained by the Exchange, the Sections that will require notice by 
web portal or email pursuant to Section 204.00 all relate to matters 
where timely notification 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.\13\ The 
Commission therefore believes that the proposed rule change is 
consistent with the Act, as more clear, easy to follow, and easily 
recorded notification methods should facilitate the transmission of 
information and promote transparency for the benefit of investors 
consistent with Section 6(b)(5) of the Act.\14\
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    \13\ The Commission also notes that the Exchange provides for 
alternative methods of notification should electronic communications 
systems be unavailable. See supra note 7 and accompanying text.
    \14\ The Commission notes that the Exchange has committed in its 
rule text to displaying prominently on its Web site the specific 
electronic web-based communication system that listed companies must 
use to give notice in accordance with Section 204.00. Accordingly, 
the Commission believes that the proposed rule change should 
facilitate listed companies' means of providing notice of certain 
events while ensuring that all listed companies should be able to 
determine how they must comply with such notification requirements.
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    Likewise, with respect to the remaining notification provisions in 
the Manual where timely notification is less critical, it is reasonable 
to allow companies more flexibility to determine what method of 
notification best suits a particular situation. The Commission notes 
that, even in such cases, the Exchange is offering to allow companies 
to use the electronic web-based notification methods of 204.00 if they 
would like to use such methods.
    The Commission also finds that the remaining clarifying, 
conforming, administrative, and technical changes are consistent with 
the Act. The changes to the Guide make it consistent with language used 
elsewhere in the Guide and Manual. For instance, the revision of the 
Item in the Guide dealing with press releases conforms the language 
used in that Guide entry with the corresponding language in Section 
202.06(B). The same is true of the change to the Due Date description 
associated with Shareholders' Meeting/Notice of Record Date or Change 
of Record Date, which is meant to mirror language used in the Due Date 
description of the Guide entry associated with Dividend Notification. 
Because these changes conform the Guide's language to what is used 
elsewhere in the Manual, they promote consistency and transparency and 
reduce the potential for confusion. Similarly, in Section 311.01, the 
Exchange's deletion of a second, potentially conflicting method of 
notification of redemption actions should reduce listed companies' 
confusion as to how to comply with the provision, and ultimately, this 
should promote transparency and protect investors by ensuring better 
and more accurate notification. Lastly, the change to Section 402.01 
that reduces the number of copies of proxy material that listed 
companies must provide to the Exchange lessens the administrative 
burden imposed on issuers without, as the Exchange represents, 
threatening the Exchange's review of such material for the benefit and 
protection of investors.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\15\ that the proposed rules change (SR-NYSE-2012-54) be, and 
hereby is, approved.
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    \15\ 15 U.S.C. 78s(b)(2).
    \16\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(83).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00876 Filed 1-16-13; 8:45 am]
BILLING CODE 8011-01-P