Document ID: SEC-2009-0604-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Amending theExchange's Timely Alert Policy
Posted Date: 2009-05-04T04:00Z

[Federal Register Volume 74, Number 84 (Monday, May 4, 2009)]
[Notices]
[Pages 20516-20518]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-10119]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59823; File No. SR-NYSE-2009-40]

 Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC 
Amending the Exchange's Timely Alert Policy

April 27, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 8, 2009, New York Stock Exchange, LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'' or ``SEC'') the proposed rule change as described in 
Items I, II, and III 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\ 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 Section 202.06 of the Listed Company 
Manual to provide that companies can comply with the Exchange's 
immediate release policy by disseminating the information by any 
Regulation Fair Disclosure (``Regulation FD'') compliant method (or 
combination of methods). The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
http://www.nyse.com.

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.

[[Page 20517]]

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
    Section 202.05 of the Listed Company Manual requires a listed 
company to release quickly to the public any news or information which 
might reasonably be expected to materially effect the market for its 
securities (the ``immediate release policy''). Section 202.06 provides 
that companies should comply with the immediate release policy by 
issuing a press release.
    Regulation FD was adopted by the SEC in 2000 in order to curb the 
selective disclosure of material non-public information by issuers to 
analysts and institutional investors.\3\ Generally, Regulation FD 
requires that when an issuer discloses material information, it do so 
publicly. Public disclosure under Regulation FD can be accomplished by 
filing a Form 8-K with the SEC or through another method of disclosure 
that is reasonably designed to provide broad, non-exclusionary 
distribution of the information to the public. In addition to a broadly 
disseminated press release, Regulation FD compliant methods of 
disclosure may include furnishing to or filing with the SEC a Form 8-K 
as well as conference calls, press conferences and webcasts, so long as 
the public is provided adequate notice (generally by press release) and 
granted access.\4\
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    \3\ See Securities Exchange Act Release No. 43154 (August 15, 
2000), 65 FR 51716 (August 24, 2000) (``Regulation FD Adopting 
Release'').
    \4\ See Regulation FD Adopting Release at pages 51723-51724.
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    Since the adoption of Regulation FD, some non-NYSE listed companies 
have adopted the practice of issuing material disclosures in a Form 8-K 
rather than by way of a press release. It has been the Exchange's 
experience that some companies are confused as to their disclosure 
obligations under Exchange rules, with companies sometimes assuming 
that a disclosure in a Form 8-K is sufficient to comply with the 
Exchange's immediate release policy. Furthermore, some companies that 
do understand the Exchange's press release requirements have expressed 
the view that a press release is redundant when the company is filing a 
Form 8-K to meet its Regulation FD requirements. In addition, some 
companies wish to publicize material news through the company website, 
as the SEC has provided recent guidance that this approach is 
appropriate under certain circumstances.\5\
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    \5\ See Securities Exchange Act Release No. 58288 (August 1, 
2008), 73 FR 45862 (August 7, 2008).
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    The Exchange now proposes to amend Section 202.06 to provide that 
companies may comply with the immediate release policy by disseminating 
the information using any method (or combination of methods) that 
constitutes compliance with Regulation FD. Foreign private issuers are 
subject to the timely alert policy but they are not required to comply 
with Regulation FD. Notwithstanding their exemption from Regulation FD, 
Section 202.06 will allow foreign private issuers to comply with the 
timely alert policy by any method (or combination of methods) that 
would constitute compliance with Regulation FD for a domestic U.S. 
issuer. While the Exchange continues to believe that there are benefits 
to the market and investors generally if companies issue press releases 
when disclosing material information, the Exchange nonetheless believes 
that it is appropriate to harmonize its requirements in this regard 
with Regulation FD and Nasdaq rules thereby eliminating the confusion 
inherent in having different regimes applied by the two largest listing 
exchanges and the SEC.\6\\\ The Exchange believes that many companies 
will continue to issue press releases in relation to material news 
events, but also believes that it is appropriate to enable companies to 
utilize the flexibility and discretion with respect to the method of 
disclosure provided by Regulation FD.
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    \6\ See Securities Exchange Act Release No. 46288 (July 31, 
2002), 67 FR 51306 (August 7, 2002) (SR-NASD-2002-85) (the ``Nasdaq 
Amendment'').
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    Section 202.06(B) currently provides 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 (9:30 a.m. to 5 p.m., New York time \7\), it is 
recommended that the company's Exchange representative be notified by 
telephone at least ten minutes prior to release of the announcement. 
This timely notification enables the Exchange to consider whether, in 
the opinion of the Exchange, trading in the security should be 
temporarily halted.\8\ The Exchange proposes to amend this text to make 
it clear that the notification to the Exchange of such announcements is 
a requirement of the rule and not just a recommendation. In addition, 
the Exchange proposes to amend Section 202.06(B) to require the listed 
company when contacting the Exchange to disclose to the Exchange the 
substance of the announcement, identify to the Exchange the Regulation 
FD-compliant method it intends to use to disseminate the news and 
provide the Exchange with the information necessary to locate the 
information upon publication. The rule is also amended to require the 
company, when the announcement is in written form, to provide the text 
of the proposed announcement to the Exchange by email at the time it 
notifies the Exchange.
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    \7\ While the NYSE's trading day ends officially at 4 p.m., New 
York time, there are crossing sessions until 5 p.m., New York time.
    \8\ See NYSE Rule 123D(1) for the Exchange's procedures with 
respect to delayed openings and trading halts pending dissemination 
of material news.
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    The Exchange will continue to evaluate the materiality of these 
disclosures and implement temporary trading halts, where appropriate, 
to facilitate the orderly dissemination of certain issuer announcements 
having a potentially material impact on the price of the securities.
    The Exchange is also proposing several other minor changes to 
Section 202.06. The Exchange is adding a parenthetical to Section 
202.06(B), referring readers to Exchange Rule 123D(1) for the 
Exchange's policies with respect to delayed openings and trading halts. 
Additionally, Section 202.06(C) is being amended (i) to provide that 
public disclosures which may significantly affect trading should be 
provided to the Exchange by e-mail rather than by facsimile 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 
Regulation FD compliant method and not just by press release.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
and furthers the objectives of Section 6(b)(5) of the Act,\9\ in that 
it is designed to prevent fraudulent and manipulative practices, to 
promote just and equitable principles of trade,to remove impediments 
to, and perfect the mechanisms of, a free and open market and a 
national market system, and, in general, to protect investors and the 
public interest.\10\
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    \9\ 15 U.S.C. 78f(b)(5).
    \10\ The Commission notes that, in the purpose section of the 
Form 19b-4, the Exchange provided a more complete statutory basis 
for the proposed rule change, as follows: The Exchange believes that 
the proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''), in general, and 
furthers the objectives of Section 6(b)(5) of the Act, 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. The Exchange believes that the proposed 
amendment is consistent with the investor protection objectives of 
the Act in that it harmonizes the Exchange's immediate release 
policies with the SEC's requirements in Regulation FD.

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[[Page 20518]]

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 purposes of the Act.

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 \11\ and Rule 19b-4(f)(6) thereunder.\12\ 
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.\13\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ The Commission notes that pursuant to Rule 19b-4(f)(6)(iii) 
under the Act, the Exchange is required 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 the proposed rule 
change, the Commission may summarily abrogate 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2009-40 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2009-40. This file 
number should be included on the subject line if e-mail 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 inspection and 
copying in the Commission's Public Reference Room, on official business 
days between the hours of 10 a.m. and 3 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-2009-40 and should be submitted on or before May 26, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-10119 Filed 5-1-09; 8:45 am]
BILLING CODE 8010-01-P