Document ID: SEC-2017-1403-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2017-08-18T04:00Z

[Federal Register Volume 82, Number 159 (Friday, August 18, 2017)]
[Notices]
[Pages 39485-39486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17455]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81393; File No. SR-NYSE-2017-17]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order 

Granting Approval of Proposed Rule Change To Provide Advance Notice of 

Dividend or Stock Distribution Announcements to the Exchange

August 14, 2017.

I. Introduction

    On June 13, 2017, New York Stock Exchange LLC (``NYSE'' or the 

``Exchange'') filed with the Securities and Exchange Commission 

(``Commission''), pursuant to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4 

thereunder,\2\ a proposed rule change to amend the NYSE Listed Company 

Manual (the ``Manual'') to require listed companies to provide notice 

to the Exchange at least ten minutes before making any public 

announcement with respect to a dividend or stock distribution, 

including when the notice is outside of Exchange trading hours. The 

proposed rule change was published for comment in the Federal Register 

on June 30, 2017.\3\ The Commission received no comments regarding the 

proposal. 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. 81021 (June 26, 

2017), 82 FR 29966 (``Notice'').

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II. Description of the Proposal

    Currently, the Exchange's immediate news release policy, set forth 

in Section 202.06 of the Manual, requires companies releasing material 

news, between 7:00 a.m. and 4:00 p.m. Eastern Time to notify the 

Exchange's Market Watch team by telephone at least ten minutes prior to 

issuing their announcement and, when the announcement is in written 

form, email a copy of the proposed announcement to Market Watch at 

least ten minutes prior its release (``immediate news release 

policy'').\4\ In its proposal, NYSE stated that listed companies 

announcing dividend or stock distributions during the hours noted above 

are required to comply with the immediate news release policy in 

connection with such announcements.

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    \4\ See Sections 202.05 (Timely Disclosure of Material News) and 

202.06 (Procedure for Public Release of Information; Trading Halts) 

of the Manual.

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[[Page 39486]]

    In addition to announcing dividend or stock distributions publicly 

pursuant to the immediate news release policy, listed companies are 

also required to give prompt notice to the Exchange as to any dividend 

action or action relating to a stock distribution in respect of a 

listed stock (including the omission or postponement of a dividend 

action at the customary time as well as the declaration of a dividend) 

(``dividend or stock distribution notice'').\5\ The dividend or stock 

distribution notice must be given to the Exchange at least ten days in 

advance of the record date in accordance with the procedures set forth 

in Section 204.00 (Notice to and Filing with the Exchange) of the 

Manual.\6\ Section 204.12 further requires such dividend or stock 

distribution notice to be given to the Exchange as soon as possible 

after declaration and in any event, no later than simultaneously with 

the announcement to the news media.\7\ Section 204.21 of the Manual 

also requires listed companies to give prompt notice to the Exchange of 

the fixing of a date for the taking of a record of shareholders, or for 

the closing of transfer books (in respect of a listed security), for 

any purpose.\8\

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    \5\ See Section 204.12 (Dividends and Stock Distributions) of 

the Manual. Section 204.12 also sets forth specific requirements on 

the information required to be in the dividend or stock distribution 

notice to the Exchange.

    \6\ See id. See also Section 204.21 (Record Date) of the Manual. 

Section 204.00(A) of the Manual requires that such notice must be 

provided via a web portal or email address specified by the Exchange 

on its Web site, except in emergency situations, when notification 

may instead be provided by telephone and confirmed by facsimile as 

specified by the Exchange on its Web site.

    \7\ See Section 204.12 of the Manual.

    \8\ See Section 204.21 (Record Date) of the Manual. The notice 

must state the purpose(s) for which the record date has been fixed 

and must be provided to the Exchange in accordance with Section 

204.00. See also Section 204.12 of the Manual, supra note 5. and 

Rule 10b-7 of the Securities Exchange Act of 1934. Rule 10b-17, 

among other things, requires notice of a dividend to be given to a 

national securities exchange no later than 10 days prior to the 

record date. Id.

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    The Exchange proposes to amend Sections 204.12 and 204.21 of the 

Manual to specify that notice of any dividend or stock distribution 

required by Section 204.12, or the fixing of a record date with respect 

to a dividend or stock distribution under Section 204.21, must be 

provided to the Exchange at least ten minutes before its public 

announcement to the news media, including when such announcement is 

being made outside of Exchange trading hours.\9\ The Exchange also 

proposes to amend Section 202.06(B) to explicitly state that listed 

companies must comply with the immediate news release policy with 

respect to all announcements relating to a dividend or stock 

distribution. The Exchange notes that this change is a ``consistent 

interpretation'' of its immediate news release policy.

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    \9\ The Exchange states that it intends to have its staff 

available at all times to review dividend or stock distribution 

notices immediately upon receipt, regardless of the time or date the 

notices are received. See Notice, supra note 3, at 29967. The 

Exchange staff will contact a listed company immediately if there is 

a problem with its notification. Id.

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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 

change is consistent with the requirements of the Exchange Act and the 

rules and regulations thereunder applicable to a national securities 

exchange.\10\ In particular, the Commission finds that the proposed 

rule change is consistent with Section 6(b)(5) of the Exchange Act,\11\ 

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 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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    \10\ In approving this proposal, the Commission has considered 

the proposed rule's impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f).

    \11\ 15 U.S.C. 78f(b)(5).

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    The Commission believes that the proposed amendments to the Manual 

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. In this regard, the Commission notes that in 

addition to requiring ten days advance notice of a record date, Section 

204.12 of the Manual requires listed companies to provide specific 

information in its notice to the Exchange concerning any dividend 

action or action relating to stock distributions. This information is 

important because, among other things, it provides information 

concerning the record date, which determines when the stock will trade 

on the Exchange ex-dividend or ex-distribution, as well as requirements 

to set forth the brokers' cut off dates for determining full and 

fraction share requirements after the record date. The Commission also 

notes that Rule 10b-17 of the Exchange Act sets forth specific 

information that must be provided by listed companies to the Exchange 

in setting record dates for dividends and stock distributions.

    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. Based on the above, the Commission finds that 

the changes to Sections 204.12 and 202.21 of the Manual requiring ten 

minutes advance notice of distributions prior to public announcements, 

whatever time of day issued, is consistent with Section 6(b)(5) in that 

it prevents fraudulent and manipulative act and practices as well as 

promoting investor protection and the public interest. Finally, the 

Commission finds that the proposed amendments to Section 202.06 of the 

Manual are consistent with the Exchange 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.

    For the reasons discussed above, the Commission believes that the 

proposed rule change is consistent with the Exchange Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 

Exchange Act,\12\ that the proposed rule change (SR-NYSE-2017-17) be, 

and hereby is, approved.

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    \12\ 15 U.S.C. 78f(b)(2).

    For the Commission, by the Division of Trading and Markets, 

pursuant to delegated authority.\13\

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    \13\ 17 CFR 200.30-3(a)(12).

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Eduardo A. Aleman,

Deputy Secretary.

[FR Doc. 2017-17455 Filed 8-17-17; 8:45 am]

BILLING CODE 8011-01-P