
[Federal Register Volume 80, Number 117 (Thursday, June 18, 2015)]
[Notices]
[Pages 34949-34952]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-14970]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75167; File No. SR-NYSEMKT-2015-40]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change to Sections 401, 402 
and 404 of the NYSEMKT Company Guide To (i) Provide That Companies Can 
Comply With the Exchange's Immediate Release Policy by Disseminating 
the Information Required To Be Disseminated Pursuant to This Policy by 
Any Regulation Fair Disclosure Compliant Method or Combination of 
Methods, (ii) Clarify the Procedures Taken by the Exchange in the Event 
of Unusual Market Activity and (iii) Update References to Exchange 
Departments and Personnel and Make Other Non-Substantive Conforming 
Updates

June 12, 2015.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on June 3, 2015, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have 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 Sections 401, 402 and 404 of the 
Company Guide to provide that companies can comply with the Exchange's 
immediate release policy by disseminating the information required to 
be disseminated pursuant to this policy by any Regulation Fair 
Disclosure (``Regulation FD'') compliant method or combination of 
methods, (ii) clarify the procedures taken by the Exchange in the

[[Page 34950]]

event of unusual market activity and (iii) update references to 
Exchange departments and personnel and make other non-substantive 
conforming updates. The text of 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
Immediate Release Policy Changes
    Section 401(a) of the Company Guide requires a listed company to 
make immediate public disclosure of all material information concerning 
its affairs (the ``immediate release policy''). Section 401(b) provides 
that companies should comply with the immediate release policy by 
releasing material information to the public in a manner designed to 
obtain the widest possible public dissemination. Section 402(b)(ii) 
specifies that any public disclosure of material information should be 
made by an announcement released to the national business and financial 
news-wire services. Section 404 specifies the Exchange's surveillances 
procedures when unusual market activity occurs.
    The Exchange proposes to (i) amend Sections 401, 402 and 404 of the 
Company Guide to 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, (ii) 
clarify the procedures taken by the Exchange in the event of unusual 
market activity and (iii) update references to Exchange departments and 
personnel and make other non-substantive conforming updates.
    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.\4\ 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).\5\
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    \4\ See Securities Exchange Act Release No. 43154 (August 15, 
2000), 65 FR 51716 (August 24, 2000) (``Regulation FD Adopting 
Release'').
    \5\ See Regulation FD Adopting Release at pages 51723-51724.
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    The Exchange now proposes to amend Sections 401 and 402 of the 
Company Guide 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, 
thus companies will no longer be required to announce material news via 
a simultaneous release to the national business and financial news-wire 
services. Foreign private issuers are subject to the immediate release 
policy but they are not required to comply with Regulation FD. 
Notwithstanding their exemption from Regulation FD, Section 402(b)(ii) 
will allow foreign private issuers 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. 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 Listed 
Company Manual of New York Stock Exchange LLC (``NYSE'') and Nasdaq 
Stock Market LLC (``Nasdaq'') 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 Section 402(b)(ii) of 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 flexibility and 
discretion with respect to the method of disclosure provided by 
Regulation FD.
    Section 401(a) of the Company Guide currently provides that, when 
the announcement of news of a material event which calls for immediate 
release is made during trading hours it is essential that the company 
notify the Stock Watch Department prior to 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. The Exchange proposes to amend Section 401(a) to codify its 
long-standing interpretation of the rule that listed companies must 
notify the Exchange if they intend to release material information 
shortly before the opening as well as during trading hours which is 
consistent with the approach that the New York Stock Exchange takes as 
well. The Exchange also proposes to amend Section 401(a) to specify 
that notification to the Exchange must be made at least ten minutes 
prior to the announcement.
    The Exchange also proposes to amend Section 401(b) to permit 
companies to comply with the Exchange's immediate release policy by any 
Regulation FD-compliant method. The Exchange proposes to make a 
corresponding change in Section 402(b) and to require the listed 
company when contacting the Exchange to (i) inform the Exchange of the 
substance of the announcement and (ii) 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. Further, the Exchange proposes to 
amend Section 402(b) to state that, when the announcement is in written 
form, the company must provide the text of the announcement to the 
Exchange at least ten minutes prior to its release via email or web-
based system as specified on the Exchange's Web site.\6\ Because 
companies will be required to submit the text of their announcement to 
the Exchange via email or web-based system,\7\ the Exchange proposes to

[[Page 34951]]

delete an obsolete reference in Section 402(b) requiring companies to 
send the Exchange three copies of their announcement.
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    \6\ The proposed amendment will specify that in emergency 
situations--for instance, lack of computer or internet access, 
technical problems at the Exchange or company or incompatibility 
between Exchange and company systems--Section 402(b) will specify 
that companies may provide required notifications by telephone and 
confirmed by facsimile, as specified by the Exchange on its Web 
site.
    \7\ The proposed amendment will specify that the Exchange will 
promptly update and prominently display that posting if the 
applicable web portal or email address changes at any time.
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    Section 401(a) of the Company Guide states that a company must 
notify the Exchange's Stock Watch Department prior to the announcement 
of material information. It has been the Exchange's long-standing 
practice to require that companies call the Exchange when such 
situations occur. The Exchange, therefore, proposes to codify this 
practice in Section 402(b)(i), clarifying that a company must call, 
rather than simply notify, the Exchange prior to the announcement. If a 
listed company intends to comply with the immediate release policy by 
issuing a press release, the proposed amendment to Section 402(b)(ii) 
will specify that in order to ensure adequate coverage the press 
release should be given to Dow Jones & Company, Inc., Reuters Economic 
Services and Bloomberg Business News. The proposed amendment to Section 
402(b)(ii) will also specify that foreign private issuers can comply 
with the Exchange's immediate release policy by any Regulation FD 
method (or combination of methods). The Exchange also proposes to amend 
Section 402(b)(ii) to specify that listed companies may disseminate 
information via their Web site, as opposed to the Internet generally, 
and social media as permitted by Regulation FD. However, the proposed 
amendment will state that if a company utilizes its Web site or social 
media to disseminate information it must comply with the Commission's 
guidelines applicable thereto.\8\ Because listed companies will be 
required to comply with the Commission's guidelines in this regard, the 
Exchange proposes to delete a sentence requiring companies to transmit 
information to traditional news vendor services prior [sic] making it 
available on the Internet as this requirement is no longer necessary. 
The Exchange proposes to amend Section 402(b)(ii) to delete references 
to private networks such as PR Newswire as they are obsolete and to 
change a reference from ``newspapers'' to ``media'' to encompass the 
multiple forms of media in which material news can be disseminated.
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    \8\ See Securities Exchange Act Release No. 58288 (August 7, 
2008) and Securities Exchange Act Release No. 69279 (April 2, 2013). 
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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    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 securities or 
trading activity to ensure fair and orderly markets.
Clarification of Procedures Taken by the Exchange in the Event of 
Unusual Market Activity
    Consistent with Section 202.06 of the NYSE Listed Company Manual 
and Rule 5250(b)(1) of the Nasdaq Stock Market Rules, the Exchange 
proposes to include a statement in Section 402(d) of the Company Guide 
to indicate that, in the event of unusual market activity or rumors, 
the Exchange may contact the listed company to inquire about any 
company developments that have not been publicly announced but that 
could be responsible for the activity. If it is determined that the 
market appears to reflect undisclosed information, the Exchange will 
normally request that such information be publicly disclosed 
immediately.
    Because the procedures for contacting the Exchange will be set 
forth on the Exchange's Web site, the Exchange proposes to delete a 
paragraph in Section 402(g) that now includes outdated contact 
information.
    Lastly, the Exchange proposes to delete a reference to its Market 
Surveillance Department in Section 404 of the Company Guide. The 
Exchange notes that certain of its market oversight responsibilities 
are currently performed by the Financial Industry Regulatory Authority 
(``FINRA'') pursuant to a regulatory services agreement, including 
responsibility relating to the surveillance, investigation and 
enforcement of insider trading rules.\9\ Accordingly, the Exchange does 
not currently maintain a Market Surveillance Department that checks 
with brokerage firms as to the reasons behind unusual trading activity, 
as this function is performed by FINRA. The Exchange remains 
responsible for FINRA's performance under the regulatory services 
agreement.
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    \9\ See Securities Exchange Act Release No. 58536 (September 12, 
2008), 73 FR 54646 (September 22, 2008). See also Securities 
Exchange Act Release Nos. 58806 (October 17, 2008), 73 FR 63216 
(October 23, 2008); 61919 (April 15, 2010), 75 FR 21051 (April 22, 
2010); 63103 (October 14, 2010), 75 FR 64755 (October 20, 2010); 
63750 (January 21, 2011), 76 FR 4948 (January 27, 2011); and 65991 
(December 16, 2011), 76 FR 79714 (December 22, 2011).
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Changes in References to Exchange Departments and Personnel and Other 
Conforming Updates
    Since the acquisition of the American Stock Exchange (the ``Amex'') 
by NYSE Euronext and its renaming as NYSE MKT, the references to the 
Listing Qualifications Department, Listing Qualifications Analysts and 
the Exchange's Stock Watch Department are no longer accurate. It is 
proposed that these legacy Amex-related references in Sections 401 and 
402, including phone numbers, should be replaced. Companies will be 
directed to contact the Exchange and a statement that will include the 
relevant contact information to be used when contacting Exchange staff 
can be found on the Exchange's Web site at nyse.com. References to 
``specialists'' are changed throughout Section 402 to refer to 
Designated Market Makers (``DMMs''). Lastly, Sections 402 and 404 of 
the Company Guide previously referred to market action and market 
activity inconsistently. The Exchange proposes to change all references 
to ``market action'' to ``market activity.''
 2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Exchange Act,\10\ in general, and furthers the objectives 
of Section 6(b)(5) of the Act,\11\ in particular, in that it is 
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. The Exchange believes the proposed amendment is consistent 
with the investor protection objectives of the Exchange Act in that it 
harmonizes the Exchange's immediate release policy with the 
Commission's requirements in Regulation FD. The Exchange further 
believes that specifying that public disclosures which may 
significantly affect trading should be submitted to the Exchange via 
email or web-based system enables the Exchange to promptly determine 
whether a trading halt is appropriate to allow for dissemination of 
such material news to the marketplace thereby protecting investors and 
the public interest. Lastly, 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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    \10\ 15 U.S.C. 78f(b).
    \11\ 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 will 
impose any burden on competition that is not

[[Page 34952]]

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 and the 
immediate release policies of the NYSE and Nasdaq, harmonizes the 
method of compliance with the Exchange's immediate release policy with 
the methods of compliance for the NYSE and Nasdaq immediate release 
policies and makes other non-substantive changes to the Company Guide. 
Accordingly, there will be no burden on competition as a result of the 
amendment.

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

    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 for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
    At any time within 60 days of the filing of the 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.

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-NYSEMKT-2015-40 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEMKT-2015-40.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-NYSEMKT-2015-40 and should 
be submitted on or before July 9, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-14970 Filed 6-17-15; 8:45 am]
BILLING CODE 8011-01-P


