In mid-April, the NYSE proposed a change that would require NYSE listed companies to provide notice to the NYSE at least 10 minutes before making a public announcement regarding a dividend or stock distribution (e.g., stock split) in all cases, including outside the hours in which the NYSE's immediate release policy is in operation. The NYSE subsequently withdrew its proposal after the SEC rejected the proposal for technical reasons. We expect the NYSE to resubmit the proposal to the SEC within the next few months.
The NYSE's immediate release policy (Sections 202.05 and 202.06 of the NYSE Listed Company Manual) requires companies releasing material news (including dividend-related announcements) between 7:00 a.m. ET and the close of trading on the NYSE (generally 4:00 p.m. ET) to call and email the NYSE's Market Watch team at least 10 minutes before issuing the public announcement to discuss its content.
A related rule (Section 204.12 of the NYSE Listed Company Manual) requires companies to give prompt notice to the NYSE regarding any dividend- or stock distribution-related action, including the omission or postponement of a dividend-related action. This notice must be given at least 10 days before the record date and is in addition to the disclose requirements under the immediate release policy. Notice must be given as soon as possible after a dividend is declared but no later than simultaneously with release to the media. In addition, Section 204.21 of the NYSE Listed Company Manual requires companies to give prompt notice to the NYSE of fixing a record date for any purpose.
The NYSE proposed to amend each of Sections 204.12 and 204.21 of the NYSE Listed Company Manual to specify that notice of any dividend or stock distribution must be provided to the NYSE at least 10 minutes before any public announcement. In short, this rule change would require companies to provide 10 minutes' advance notice to the NYSE with respect to a dividend announcement made at any time rather than just during the hours of operation, as required by the immediate release policy.
The NYSE also proposed to amend Section 202.06(B) of the NYSE Listed Company Manual to emphasize the NYSE's consistent interpretation of that rule as requiring listed companies to comply with the immediate release policy with respect to all announcements relating to a dividend or stock distribution.
The NYSE's goal is to ensure it has access to dividend information prior to its public availability to hopefully avoid confusion in the marketplace if there is contradictory information available from multiple sources or uncertainty as to whether news reports of dividends are accurate.
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