82 FR 39485 - 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

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 159 (August 18, 2017)

Page Range		39485-39486
FR Document		2017-17455
Federal Register, Volume 82 Issue 159 (Friday, August 18, 2017)
[Federal Register Volume 82, Number 159 (Friday, August 18, 2017)]
[Notices]
[Pages 39485-39486]
From the Federal Register Online  [www.thefederalregister.org]
[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
Federal Register / Vol. 82, No. 159 / Friday, August 18, 2017 / Notices 39485

IM Liquidity Requirements’’ section of purposes of ICC’s business activities. SECURITIES AND EXCHANGE
the Treasury Policy to reflect the Moreover, ICC has noted that JPY has a COMMISSION
proposed liquidity requirement changes, significant timing issue related to
namely USD-denominated product conversion. ICC also expressed the view [Release No. 34–81393; File No. SR–NYSE–
requirements of 65% cash and/or U.S. that, from a practical standpoint, these 2017–17]
Treasuries, and 35% remainder eligible changes should have minimal impact on
U.S. cash, U.S. Treasuries, and/or Euro ICC’s financial resource composition Self-Regulatory Organizations; New
cash; and Euro-denominated product York Stock Exchange LLC; Order
because such currencies have been
requirements of 100% U.S. cash, Euro Granting Approval of Proposed Rule
utilized rarely by Clearing Participants
cash, and/or U.S. Treasuries. The Change To Provide Advance Notice of
to meet IM and GF requirements. The Dividend or Stock Distribution
proposed changes also include
Commission believes that, by removing Announcements to the Exchange
removing reference to G7 cash and
including U.S. Treasury securities, U.S. JPY, GBP, and CAD as eligible forms of
collateral that may be posted to ICC, ICC August 14, 2017.
cash, and Euro cash as eligible collateral
from the House IM and GF Liquidity reduces the risk that ICC would not be I. Introduction
Requirements (for Non-Client USD and able to meet its settlement or other
liquidity obligations timely because of On June 13, 2017, New York Stock
Euro-denominated requirements) chart,
the need to convert one currency to Exchange LLC (‘‘NYSE’’ or the
the list of acceptable forms of collateral
another. The Commission therefore ‘‘Exchange’’) filed with the Securities
for IM, and the list of acceptable forms
finds that the proposed revisions to the and Exchange Commission
of collateral for the GF).
(‘‘Commission’’), pursuant to Section
ICC Rules and Treasury Policy are
III. Discussion and Commission 19(b)(1) of the Securities Exchange Act
designed to promote the prompt and
Findings of 1934 (‘‘Exchange Act’’) 1 and Rule
accurate settlement of securities
Section 19(b)(2)(C) of the Act 4 directs 19b–4 thereunder,2 a proposed rule
transactions, derivatives agreements, change to amend the NYSE Listed
the Commission to approve a proposed contracts, and transactions for which
rule change of a self-regulatory Company Manual (the ‘‘Manual’’) to
ICC is responsible, consistent with require listed companies to provide
organization if it finds that such Section 17A(b)(3)(F) of the Exchange
proposed rule change is consistent with notice to the Exchange at least ten
Act. Similarly the proposed changes are minutes before making any public
the requirements of the Act and the
designed to allow ICC to hold collateral announcement with respect to a
rules and regulations thereunder
applicable to such organization. Section in forms that minimize the risk of loss dividend or stock distribution,
17A(b)(3)(F) of the Act 5 requires, among or delay in accessing them by reducing including when the notice is outside of
other things, that the rules of a the need for ICC to conduct currency Exchange trading hours. The proposed
registered clearing agency be designed conversions. The Commission therefore rule change was published for comment
to promote the prompt and accurate finds that the proposed revisions also in the Federal Register on June 30,
clearance and settlement of securities are consistent with the requirements of 2017.3 The Commission received no
transactions and, to the extent Rule 17Ad–22(d)(3). comments regarding the proposal. This
applicable, derivative agreements, order approves the proposed rule
IV. Conclusion change.
contracts, and transactions, to assure the
safeguarding of securities and funds It is therefore ordered pursuant to II. Description of the Proposal
which are in the custody or control of Section 19(b)(2) of the Act that the
the clearing agency or for which it is Currently, the Exchange’s immediate
proposed rule change (SR–ICC–2017– news release policy, set forth in Section
responsible and, in general, to protect 010) be, and hereby is, approved.7
investors and the public interest. Rule 202.06 of the Manual, requires
17Ad–22(d)(3) 6 requires that a For the Commission by the Division of companies releasing material news,
registered clearing agency shall Trading and Markets, pursuant to delegated between 7:00 a.m. and 4:00 p.m. Eastern
authority.8 Time to notify the Exchange’s Market
establish, implement, maintain and
enforce written policies and procedures Eduardo A. Aleman, Watch team by telephone at least ten
reasonably designed to hold assets in a Assistant Secretary. minutes prior to issuing their
manner that minimizes risk of loss or of [FR Doc. 2017–17431 Filed 8–17–17; 8:45 am]
announcement and, when the
delay in its access to them. announcement is in written form, email
BILLING CODE 8011–01–P
The Commission finds that the a copy of the proposed announcement
proposed rule change, which removes to Market Watch at least ten minutes
JPY, GBP, and CAD from eligibility to prior its release (‘‘immediate news
meet IM and GF requirements, is release policy’’).4 In its proposal, NYSE
consistent with Section 17A of the Act stated that listed companies announcing
and Rule 17Ad–22 thereunder. dividend or stock distributions during
According to ICC, ICC would need to the hours noted above are required to
convert JPY, GBP, and CAD into another comply with the immediate news
currency in order to use them to satisfy release policy in connection with such
obligations arising from the products announcements.
mstockstill on DSK30JT082PROD with NOTICES

that ICC clears, which are denominated
1 15 U.S.C. 78s(b)(1).
only in USD or Euros. Therefore, from
2 17 CFR 240.19b–4.
ICC’s perspective, JPY, GBP, and CAD
3 See Securities Exchange Act Release No. 81021
are not as liquid as USD or Euros for 7 In approving the proposed rule change, the
(June 26, 2017), 82 FR 29966 (‘‘Notice’’).
Commission considered the proposal’s impact on 4 See Sections 202.05 (Timely Disclosure of
4 15 U.S.C. 78s(b)(2)(C). efficiency, competition, and capital formation. 15 Material News) and 202.06 (Procedure for Public
5 15 U.S.C. 78q–1(b)(3)(F). U.S.C. 78c(f). Release of Information; Trading Halts) of the
6 17 CFR 240.17Ad–22(d)(3). 8 17 CFR 200.30–3(a)(12). Manual.

VerDate Sep<11>2014 17:47 Aug 17, 2017 Jkt 241001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 E:\FR\FM\18AUN1.SGM 18AUN1
Document Created: 2017-08-18 07:40:41
Document Modified: 2017-08-18 07:40:41
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 39485