[Federal Register: September 15, 2008 (Volume 73, Number 179)]
[Notices]
[Page 53303-53304]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15se08-124]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58487; File No. SR-NYSE-2008-59]
Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Approving Proposed Rule Change To Reduce the Period Within Which
Companies Must Issue a Press Release After the Exchange Notifies Them
That They Are Noncompliant With Exchange Listing Requirements
September 8, 2008.
I. Introduction
On July 22, 2008, 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 reduce the period within which companies must
issue a press release after the Exchange notifies them that they are
noncompliant with Exchange listing requirements. The proposed rule
change was published for comment in the Federal Register on August 4,
2008.\3\ The Commission received one comment in support of the
proposal.\4\ This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 58235 (July 28,
2008), 73 FR 45262.
\4\ See email from R. Cameron Brewer, dated August 23, 2008.
---------------------------------------------------------------------------
II. Description of the Proposal
Section 802.02 of the NYSE's Listed Company Manual (the ``Manual'')
currently requires a U.S. company to issue a press release within 45
days of receiving written notification from the Exchange that it has
fallen below the Exchange's continued listing standards. This section
further provides that if the company fails to issue the press release
during the allotted 45 days, the Exchange will issue the requisite
press release. Similarly, Section 802.03 of the Manual currently
requires a non-U.S. company to issue a press release within 90 days of
receiving written notification from the Exchange that it has fallen
below the Exchange's listing standards. In addition, if the company
fails to issue the press release during the allotted time, the Exchange
will issue the required press release.
The Exchange proposes to amend Section 802.02 of the Manual to
provide that a U.S. company must disclose receipt of written
notification that it has fallen below the Exchange's listing standards
by issuing a press release within the amount of time allotted by the
SEC for companies to disclose such an occurrence, but in any event, no
later than four business days after receipt of notification from the
Exchange.\5\ Further, the amended rule would provide that the Exchange
will issue a press release on the subject itself if the company has not
acted within this allotted period. The Exchange notes that Commission
rules currently require companies to file a Form 8-K within four
business days of being notified by the Exchange that it does not
satisfy a rule or standard for continued listing on the Exchange.\6\
The Exchange, therefore, believes that the current time period in its
own rules of 45 days is too long in light of the much earlier public
notice required by the Form 8-K rule.
---------------------------------------------------------------------------
\5\ The Exchange notes that companies that are incorporated in
jurisdictions outside the United States but that do not qualify as
foreign private issuers are treated as domestic companies for
purposes of Section 802.02.
\6\ Item 3.01 of Form 8-K requires a registrant to file a Form
8-K within four business days of receipt of notice from the national
securities exchange that maintains the principal listing for any
class of the registrant's common equity that the registrant or such
class of the registrant's securities does not satisfy a rule or
standard for continued listing on the exchange.
---------------------------------------------------------------------------
The Exchange also proposes to amend Section 802.03 of the Manual to
require a non-U.S. company to issue a press release within 30 days of
receiving written notification that it has fallen below the Exchange's
listing standard. Further, if the company does not issue a press
release within that 30-day period, the Exchange will do so. The
Exchange notes that, while foreign private issuers are not subject to
the Form 8-K requirement imposed on domestic issuers, the Exchange
believes that 90 days is an excessive period to give companies to make
such a material disclosure. As such, the Exchange proposes to reduce
from 90 days to 30 days the period within which foreign private issuers
must issue a press release with regard to a notification by the
Exchange of noncompliance with Exchange listing standards.
III. Discussion
After careful review, the Commission finds that the proposed rule
change is
[[Page 53304]]
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange
and, in particular, with Section 6(b)(5) of the Act,\7\ 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.\8\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b)(5).
\8\ 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).
---------------------------------------------------------------------------
The Commission believes that it is appropriate for the NYSE to
align the timing requirement in Section 802.02 of the Manual for
issuance of a press release when a company has received notice that it
has fallen below the Exchange's continued listing standards with the
Commission's timing requirement for providing notification of such
event on the Form 8-K. The Commission believes that this change will
ensure that a company issues a press release no later than the date it
is currently required to file a Form 8-K providing notice of such
event. The Commission notes that the amended rule provides that the
company must issue a press release within the time period allotted by
SEC rules, but in any event, no longer than four business days after
notification. The Commission believes that reducing the time period
from 45 days to 4 days within which companies must issue a press
release is consistent with the protection of investors and the public
interest because it will provide investors with earlier press release
notification that the company has fallen out of compliance with
Exchange listing requirements and avoids any confusion by conforming
the time periods in the NYSE rules with current Commission
requirements.
Further, the Commission believes that it is appropriate for the
NYSE to reduce from 90 days to 30 days the period within which non-U.S.
companies must issue a press release regarding a notification by the
Exchange of noncompliance with the Exchange's listing standards. The
Commission believes that this change should still allow companies
sufficient time to make the required disclosure, while at the same time
providing investors with a more timely notification of important news
that the company does not satisfy a rule or standard for continued
listing on the Exchange. The Commission notes that non-U.S. companies
that do not qualify as foreign private issuers would have to comply
with the amended disclosure for domestic companies pursuant to Section
802.02.\9\
---------------------------------------------------------------------------
\9\ See supra note 5.
---------------------------------------------------------------------------
The Commission also believes that it is appropriate for the
Exchange to issue a press release itself in the event that a company
has not acted within the new time periods required by this proposed
rule change. This will ensure that investors are provided notification
of a company's non-compliance in a timely fashion, regardless of a
company's failure to meet the timing requirements of these rules. The
Commission notes that the existing rule being amended herein did allow
the Exchange to make such disclosure under the longer time periods.
This proposal will permit a continuation of this authority, but with
the updated time periods.\10\
---------------------------------------------------------------------------
\10\ The Commission also notes that nothing in this proposal
affects a company's obligations to disclose material news in a
timely fashion. See Section 202.05 of the Manual.
---------------------------------------------------------------------------
For the reasons set forth above, the Commission finds that the
proposed rule change is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\11\ that the proposed rule change (SR-NYSE-2008-59) be, and hereby
is, approved.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-21332 Filed 9-12-08; 8:45 am]
BILLING CODE 8010-01-P