Document ID: SEC-2016-0325-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2016-02-25T05:00Z

[Federal Register Volume 81, Number 37 (Thursday, February 25, 2016)]
[Notices]
[Pages 9563-9566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03962]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77198; File No. SR-NYSE-2016-12]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending the NYSE Listed Company Manual To Adopt a Requirement That 
Listed Foreign Private Issuers Must, at a Minimum, Submit a Form 6-K to 
the Securities and Exchange Commission Containing Semi-Annual Unaudited 
Financial Information

February 19, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on February 5, 2016, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. 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 Listed Company Manual (the 
``Manual'') to adopt a requirement that listed foreign private issuers 
must, at a minimum, submit a Form 6-K to the Securities and Exchange 
Commission (``SEC'') containing semi-annual

[[Page 9564]]

unaudited financial information.\4\ The proposed rule change is 
available on the Exchange's Web site at www.nyse.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.
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    \4\ See footnote 6 below for a description of information that 
foreign private issuers are currently required to furnish to the SEC 
on a Form 6-K under the provisions of General Instruction B to Form 
6-K.
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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 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Manual to adopt a requirement 
that listed foreign private issuers must, at a minimum, submit a Form 
6-K to the SEC containing semi-annual unaudited financial information.
    Any listed company that is a domestic issuer is required by SEC 
rules to file a quarterly report on Form 10-Q within a specified period 
after the end of each of the company's first, second and third fiscal 
quarters. The Form 10-Q contains unaudited financial information with 
respect to the most recently completed fiscal quarter. However, listed 
companies that are foreign private issuers \5\ are not subject to any 
comparable SEC requirement with respect to interim financial 
reporting.\6\ The Exchange understands that financial reporting 
practices in other countries may differ from those in the United States 
and that it is often not the case that foreign companies issue interim 
financial information on a quarterly basis. However, it is the 
Exchange's experience that almost all listed foreign private issuers 
issue interim financial information on at least a semi-annual basis. 
The Exchange believes that this practice is essential for the 
protection of investors, as annual financial disclosure is too 
infrequent to enable investors to make informed investment decisions, 
especially as that information ages in the latter part of the 
disclosure cycle.
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    \5\ Exchange Act Rule 3b-4 defines a foreign private issuer as 
any issuer incorporated or organized under the laws of a foreign 
country, except an issuer meeting both of the following conditions: 
(i) More than 50 percent of the outstanding voting securities of the 
issuer are directly or indirectly held of record by residents of the 
United States; and (ii) any one of the following: (a) the majority 
of the executive officers or directors of the issuer are United 
States citizens or residents; or (b) more than 50 percent of the 
assets of the issuer are located in the United States; or (c) the 
business of the issuer is administered principally in the United 
States.
    \6\ The Exchange notes that General Instruction B to Form 6-K 
requires foreign private issuers to furnish on a Form 6-K whatever 
information, not required to be furnished on Form 40-F or previously 
furnished, such issuer (i) makes or is required to make public 
pursuant to the law of the jurisdiction of its domicile or in which 
it is incorporated or organized, or (ii) files or is required to 
file with a stock exchange on which its securities are traded and 
which was made public by that exchange, or (iii) distributes or is 
required to distribute to its security holders. The information 
required to be furnished pursuant to (i), (ii) or (iii) above is 
that which is material with respect to the issuer and its 
subsidiaries concerning: Changes in business; changes in management 
or control; acquisitions or dispositions of assets; bankruptcy or 
receivership; changes in registrant's certifying accountants; the 
financial condition and results of operations; material legal 
proceedings; changes in securities or in the security for registered 
securities; defaults upon senior securities; material increases or 
decreases in the amount outstanding of securities or indebtedness; 
the results of the submission of matters to a vote of security 
holders; transactions with directors, officers or principal security 
holders; the granting of options or payment of other compensation to 
directors or officers; and any other information which the 
registrant deems of material importance to security holders. As a 
result of (i) through (iii) above, foreign private issuers could be 
required to provide the information required under proposed Section 
203.03 of the Manual more frequently than semi-annually.
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    Given the importance of the practice of foreign private issuer 
listed companies reporting mid-year results, the Exchange believes that 
it is desirable to make this practice mandatory. Doing so will ensure 
that the practice is uniform among all listed foreign private issuers 
and also enables the Exchange to apply its compliance procedures for 
companies that are late in their periodic reporting to listed foreign 
private issuers that fail to disclose semi-annual financial information 
on a timely basis.
    Consequently, the Exchange proposes to adopt new Section 203.03 of 
the Manual which would provide that each listed foreign private issuer 
must, at a minimum, submit to the SEC a Form 6-K that includes (i) an 
interim balance sheet as of the end of its second fiscal quarter and 
(ii) a semi-annual income statement that covers its first two fiscal 
quarters. This Form 6-K would be required to be submitted no later than 
six months following the end of the company's second fiscal quarter. 
The financial information included in the Form 6-K would be required to 
be presented in English, but would not be required to be reconciled to 
U.S. GAAP. The Exchange's intention in adopting proposed Section 203.03 
is solely to establish a minimum interim reporting regime applicable to 
all listed foreign private issuers. The Exchange is not seeking to 
discourage companies from providing more expansive or more frequent 
interim financial information and proposed Section 203.03 would not 
relieve companies of the obligation to comply with any reporting 
obligations they may have under the requirements of Form 6-K or home 
country law or regulation. In addition, the Exchange proposes to amend 
Section 802.01E of the Manual to subject listed foreign private issuers 
that have not timely filed the required Form 6-K to the same compliance 
procedures as are applied to listed companies that are late in filing 
their annual report or Form 10-Q. A failure to file the required Form 
6-K within the period specified by proposed Section 203.03 would 
constitute a Late Filing Delinquency under Section 802.01E. As with any 
other Late Filing Delinquency under that rule, a company that was 
delayed in filing its Form 6-K would have an initial six months 
compliance period within which to file the Form 6-K and any 
subsequently due Form 20-F or Form 6-K. If the company did not file all 
required filings during that initial six month period, Exchange staff 
would have the discretion to provide an additional compliance period of 
up to six months. Any company that failed to become timely with its 
filing obligations within the compliance periods provided under the 
rule (including, in the case of a company that receives the maximum 12-
month cure period, the Form 6-K including the semi-annual data for the 
first six months of the subsequent fiscal year) would be subject to 
delisting.
    The Exchange proposes to make Section 203.03 effective beginning 
with any fiscal year beginning on or after July 1, 2015. This means 
that the earliest semi-annual period with respect to which a company 
would be required to furnish a Form 6-K under the proposed rule would 
have ended on December 31, 2015.\7\
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    \7\ The Commission notes that this means that the any listed 
company would have at least until June 30, 2016 to file the Form 6-
K, with the required semi-annual data, under the new rule.
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    The Exchange also proposes to amend Section 103.00 of the Manual to 
clarify that, notwithstanding the provision in that section that allows 
listed foreign private issuers to follow home country

[[Page 9565]]

practice in lieu of complying with the Exchange's interim reporting 
requirements applicable to domestic companies, all listed foreign 
private issuers will be required to disclose interim financial 
information in a Form 6-K on a semi-annual basis in compliance with 
proposed Section 203.03.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \8\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\9\ in particular in that it 
is 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 is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers. The Exchange believes that the proposed 
amendment is consistent with the investor protection objectives of 
Section 6(b)(5) because it is designed to ensure that listed companies 
provide timely financial information that is necessary to enable 
investors to make informed investment decisions. The Exchange believes 
that the proposed amendment does not unfairly discriminate among 
issuers, as, while it establishes a semi-annual reporting requirement 
for foreign private issuers that is different from the quarterly 
reporting to which domestic issuers are subject, this difference is 
consistent with the differential requirements imposed by the SEC. In 
addition, while a small number of companies will have less than six 
months from the date of effectiveness of the proposed rule to submit 
their first required semi-annual report, the Exchange does not believe 
that this is unfairly discriminatory as the period available to those 
companies will not be significantly less than six months and will be 
adequate to enable them to meet the proposed [sic].
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purpose of the Act. The proposed rule change is 
designed to mandate that foreign private issuer listed companies must, 
at a minimum, provide semi-annual financial information. As almost all 
NYSE-listed foreign private issuers already provide this information 
and Nasdaq listed companies are already subject to a comparable rule, 
the Exchange does not expect the rule change to have any significant 
impact on competition.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ 
Because the 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 prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\13\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange stated that 
requiring semi-annual reporting of summary financial information by 
listed foreign private issuers is consistent with the protection of 
investors and the public interest since it will ensure that investors 
have access to information that is necessary for them to make informed 
decisions about investments in those companies. The Commission believes 
that the proposed rule change will not be unduely burdensome on foreign 
private issuers as the Exchange states in its filing that most, if not 
all, effected companies already provide such information on a voluntary 
basis. Therefore, the Commission believes that the new rule should help 
to ensure that investors will have, or continue to have, the necessary 
information to make informed investments decisions for all listed 
foreign private issuers. In addition, concerning the proposed changes 
on continued listing for filing delinquencies under Section 802.01E of 
the Manual, treating Exchange listed foreign private issuers that fail 
to timely file semi-annual reports under the new rule similarly to 
listed domestic issuers that fail to file timely interim reports will 
help to ensure that investors have information necessary to assess the 
company and support continued trading on the Exchange.\14\ Based on the 
above, the Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the operative delay and 
designates the proposed rule change operative upon filing.\15\
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ See NYSE Listed Company Manual Section 802.01E.
    \15\ For the purposes only of waiving the 30-day operative 
delay, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 15 U.S.C. 78s(b)(2)(B).
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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

[[Page 9566]]

     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2016-12 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-NYSE-2016-12. 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 Web site (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 Web site 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; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSE-2016-12 and should be 
submitted on or before March 17, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-03962 Filed 2-24-16; 8:45 am]
 BILLING CODE 8011-01-P