Document ID: SEC-2016-1541-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2016-08-31T04:00Z

[Federal Register Volume 81, Number 169 (Wednesday, August 31, 2016)]
[Notices]
[Pages 60091-60093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20881]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78674; File No. SR-NYSEArca-2016-116]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca 
Equities Rule 5.3(i)(3) To Amend the Requirements for the Dissemination 
of News in Compliance With the Exchange's Immediate Release Policy

August 25, 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 August 12, 2016, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have

[[Page 60092]]

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 NYSE Arca Equities Rule 5.3(i)(3) to 
amend the requirements for the dissemination of news in compliance with 
the Exchange's immediate release policy. 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.

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
    NYSE Arca Equities Rules 5.3(i)(2) and (3) require a listed company 
to make immediate public disclosure of all material information 
concerning its affairs (the ``immediate release policy''). NYSE Arca 
Equities Rule 5.3(i)(3) provides that companies should comply with the 
immediate release policy by releasing material information 
``simultaneously to any of the following organizations'':

    ``(a) the primary business and financial newswire services (Dow 
Jones and Reuters);
    (b) the national services (e.g., Associated Press);
    (c) The WALL STREET JOURNAL, NEW YORK TIMES, LOS ANGELES TIMES, 
SAN FRANCISCO CHRONICLE, and SAN FRANCISCO EXAMINER;
    (d) Moody's Investors Service and Standard & Poor's Corporation; 
and
    (e) a company that distributes press releases over private 
teletype networks may find PR Newswire and Business Wire helpful in 
gaining news coverage.''

    The Exchange proposes to amend Rule 5.3(i)(3) to conform it to the 
immediate release policies of the New York Stock Exchange (``NYSE''), 
NYSE MKT and Nasdaq.\4\ Most significantly, the amended rule will 
provide that companies can comply with the Exchange's immediate release 
policy by disseminating the material information by any Regulation FD 
compliant method or combination of methods. Regulation FD was adopted 
by the Commission in 2000 in order to curb the selective disclosure of 
material non-public information by issuers to analysts and 
institutional investors.\5\ 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 Commission or through another method of disclosure that is 
reasonably designed to provide broad, non-exclusionary distribution of 
the information to the public (e.g. press releases, conference calls, 
press conferences and webcasts, so long as the public is provided 
adequate notice and granted access).\6\ The Exchange now proposes to 
amend Rule 5.3(i)(3) 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.
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    \4\ See Securities Exchange Act Release No. 34-59823 (April 27, 
2009); 74 FR 20516 (May 4, 2009) (SR-NYSE-2009-40). See also 
Securities Exchange Act Release No. 46288 (July 31, 2002), 67 FR 
51306 (August 7, 2002) (SR-NASD-2002-85). See also Securities 
Exchange Act Release No. 34-75167 (June 12, 2015); 80 FR 34949 (June 
18, 2015) (SR-NYSEMKT-2015-40).
    \5\ See Securities Exchange Act Release No. 43154 (August 15, 
2000), 65 FR 51716 (August 24, 2000) (``Regulation FD Adopting 
Release'').
    \6\ See Regulation FD Adopting Release at pages 51723-51724.
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    Foreign private issuers and issuers registered under the Investment 
Company Act other than closed end funds are subject to the immediate 
release policy but they are not required to comply with Regulation 
FD.\7\ Notwithstanding their exemption from Regulation FD, Rule 
5.3(i)(3) as amended will allow foreign private issuers and Investment 
Company Act registrants other than closed end funds to comply with the 
Exchange's immediate release policy by any method (or combination of 
methods) that would constitute compliance with Regulation FD for a 
domestic U.S. issuer.
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    \7\ See the definition of an ``issuer'' subject to Regulation FD 
as set forth in Section 101(b) thereof: An ``issuer'' subject to 
this regulation is one that has a class of securities registered 
under Section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 
78l), or is required to file reports under Section 15(d) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(d)), including any 
closed-end investment company (as defined in Section 5(a)(2) of the 
Investment Company Act of 1940) (15 U.S.C. 80a-5(a)(2)), but not 
including any other investment company or any foreign government or 
foreign private issuer, as those terms are defined in Rule 405 under 
the Securities Act.
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    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, as well as with Section 202.06 of the NYSE Listed 
Company Manual, NYSE MKT Company Guide Section 402 and Nasdaq 
Marketplace Rule 5250(b)(1), thereby eliminating the confusion inherent 
in having different regimes applied by different listing exchanges and 
the Commission. The Exchange believes that many companies will continue 
to issue press releases in relation to material news events, and the 
proposed amendment includes language that encourages companies to 
disclose material news via a press release. However, the Exchange also 
believes that it is appropriate to enable companies to utilize the 
[sic] flexibility and discretion with respect to the method of 
disclosure provided by Regulation FD.
    The Exchange also proposes to delete from the rule the existing 
list of methods for disseminating material news and to instead specify 
in the revised rule that any company disseminating material news by 
means of a press release should release it to the major news wire 
services, including, at a minimum, Dow Jones & Company, Inc., Reuters 
Economic Services and Bloomberg Business News. This revised provision 
is the same as the press release requirements of the NYSE and, in the 
Exchange's opinion, it represents a more effective approach to news 
dissemination than may be the case under some of the approaches 
permitted under the current rule.
    The Exchange proposes to include language in the revised rule 
specifying that listed companies choosing to comply with the immediate 
release policy by disseminating information via their Web site or 
social media must comply with the Commission's guidelines applicable to 
the use of companies' Web sites or social media for purposes of 
compliance with Regulation FD.\8\
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    \8\ See Securities Exchange Act Release No. 58288 (August 1, 
2008); 73 FR 45862 (August 7, 2008) (Commission Guidance on the Use 
of Company Web sites). See also Securities Exchange Act Release No. 
69279 (April 2, 2013) (Report of Investigation Pursuant to Section 
21(a) of the Securities Exchange Act of 1934: Netflix, Inc., and 
Reed Hastings) (available at https://www.sec.gov/litigation/investreport/34-69279.pdf). The Exchange will remind listed 
companies of the Commission's guidelines with respect to the use of 
Web sites and social media to disseminate material information.

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[[Page 60093]]

    The Exchange also proposes to replace references to the 
``Securities Qualification Department'' and the ``Surveillance 
Department'' throughout Rule 5.3 and in Rule 5.5(m) with references to 
NYSE Regulation, as there are no longer groups within the Exchange with 
those titles and the relevant work is performed in each case by the 
staff of NYSE Regulation.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\9\ in general, and furthers the 
objectives of Sections 6(b)(5) \10\ 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 the proposed amendment is consistent with the 
investor protection objectives of the Act in that it harmonizes the 
Exchange's immediate release policy with the Commission's requirements 
in Regulation FD. The Exchange believes that the remaining proposed 
amendments are consistent with Section 6(b)(5) of the Act, as none of 
them make substantive changes to the Exchange's listing requirements.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 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 would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed amendment 
simply harmonizes the Exchange's immediate release policy with the 
Commission's requirements in Regulation FD. The proposed amendment also 
harmonizes the method of compliance with the Exchange's immediate 
release policy with the methods of compliance for the NYSE, NYSE MKT 
and Nasdaq immediate release policies and makes other non-substantive 
changes to the Company Guide. Accordingly, there will be no burden on 
competition because the other markets already have similar rules.

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) \13\ of the Act and Rule 19b-
4(f)(6) thereunder.\14\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 15 U.S.C. 78s(b)(3)(A)
    \14\ 17 CFR 240.19b-4(f)(6). In addition, the Commission notes 
that Rule 19b-4(f)(6) requires the Exchange 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, or such 
shorter time as the Commission may designate. The Exchange has 
satisfied that 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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \15\ 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
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2016-116 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-NYSEArca-2016-116. 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-NYSEArca-2016-116 and should 
be submitted on or before September 21, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20881 Filed 8-30-16; 8:45 am]
BILLING CODE 8011-01-P