Blog Posts Tagged With NYSE

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NYSE Rule Filing Contemplates Direct Listings Without Concurrent IPO

The NYSE has proposed to change its rules to provide for companies to list without the usual process of an underwritten IPO and registering under the Exchange Act. Various news articles indicate that Spotify is considering a direct listing in early 2018.

The traditional methods of listing on a stock exchange include either an underwritten IPO, transfer from another market or a spinoff. The NYSE also has discretion to list companies that have previously sold common stock in a private placement, at the time a registration statement is filed to allow existing shareholders to sell their shares becomes effective. It considers whether a company has met the $100 million aggregate market value of the publicly held share requirement based on a third-party valuation and the most recent trading price in a private placement market. Continue Reading

NYSE Proposes to Require Advance Notice of All Dividend and Stock Distribution Announcements

In mid-April, the NYSE made a rule filing with the SEC to require listed companies to give notice to the Exchange at least 10 minutes before any public announcement about dividends or stock distributions.

Notification at least 10 minutes prior to public release of a dividend announcement is already required when the Exchange’s immediate release policy is in effect. Between 7:00 a.m. ET and the time the NYSE closes (usually 4:00 p.m. ET), companies are required to call the Exchange’s Market Watch team at least 10 minutes before any material news announcement. Companies must be prepared to discuss the content, and email a copy of, that announcement to the NYSE. Continue Reading

IPO Governance Practices: A Davis Polk Survey

As public company governance remains in the spotlight, we examined the governance structures of the 50 largest U.S. newly public companies at the time of their initial offerings.  Our survey of both controlled and non-controlled companies found that those companies continue to adopt various takeover defenses at the time they enter the public market, a stark contrast to the current practices of the S&P 500. Continue Reading

Nasdaq and NYSE Reminders on Material News Announcements, Including Changes to the Dates of Earnings Announcements

Both Nasdaq and the NYSE issued recent reminders to companies about key announcements that may constitute material news.

Changes to dates.  Changes to a company’s earnings release, dividend record and dividend payment dates may be material information that should be promptly disclosed publicly, Nasdaq noted recently in an issuer alert.  This includes any changes to these dates, such as when earnings are announced.  Companies must pre-notify Nasdaq MarketWatch about material information if the public release is made between 7am to 8pm ET.

The NYSE also sent guidance about the importance of making a prior public announcement of the scheduling of a company’s earnings release or any change in that schedule.  Continue Reading

NYSE Proposes Expansion of Listed Companies’ Requirements to Provide Notification of Material News and Circumstances When It Can Halt Trading

NYSE listed companies are currently required to notify the Exchange before disseminating material news so that it can halt trading if needed. Now the NYSE has proposed, in a rule filing with the SEC, to expand the pre-market hours during which companies are required to notify the Exchange, the circumstances under which it can stop trading and also provide guidance related to the release of material news after the close of trading.

Currently, Section 202.06 requires listed companies to notify the Exchange at least ten minutes in advance of releasing material news shortly before trading opens or during trading hours (9:30 a.m. Continue Reading

NYSE Proposes Amending Rules on Timing of Broker Searches for Annual and Special Meetings to Clarify Alignment with SEC Rule

The NYSE has proposed amending its rules on the solicitation of proxies through member organizations, as set forth in Section 402.05 of the Listed Company Manual, to make clear that companies or others soliciting proxy materials through brokers must comply with SEC Rule 14a-13 and that the NYSE does not have a process for permitting exemptions.

SEC Rule 14a-13 sets forth the obligations of issuers in communicating with beneficial owners through banks and brokers. Specifically, the rule requires issuers to conduct broker searches of beneficial owners for purposes of distributing proxy materials for annual or special meetings within specified time frames. Continue Reading

NYSE Proposes to Amend Its Listing Standards Related to Delinquent Filings

The NYSE has proposed to amend its listing requirements related to a company filing delinquent reports with the SEC. The proposal expands the NYSE’s existing late filer rule to include Form 10-Qs, clarifies how the NYSE will treat companies whose annual or quarterly reports are defective at the time of filing or become defective later, and establishes further procedures for handling these delinquencies.  

Currently, the rule only applies to late annual reports (Form 10-K, 20-F or 40-F). The proposal would add Form 10-Qs to its late filing rules, so that a company would be considered a delinquent filer once it misses the deadline of a Form 10-Q or annual report. Continue Reading

NYSE Letters to Domestic and Foreign Listed Companies Remind Issuers of Key

The NYSE has posted its annual letters to its domestic and foreign listed companies on its website, with timely reminders of several key annual meeting deadlines and important regulations for U.S. companies, including:

  • Broker search cards must be sent at least 20 business days before the record date for annual meetings (10 calendar days for special meetings);
  • Notification to the Exchange at least 10 calendar days in advance of all record dates set for any purpose. Any changes will require another 10-day notice;
  • Recommendation of a 30-day interval between the record date and meeting date
  • Three copies of proxy materials must be sent to the Exchange when they are first sent to shareholders; and
  • Annual CEO affirmations are due 30 days after the annual meeting, and interim affirmations are required within 5 business days after the triggering event.
Continue Reading

NYSE Webcast Looking Forward to the 2014 Proxy Season

The NYSE is hosting a webcast previewing the 2014 proxy season, on Monday, November 25 from 12 Noon to 1:00 pm (EST). We will discuss the key developments and trends expected during the 2014 proxy season. We will review ISS’s 2014 voting policy updates, anticipated shareholder proposal topics, investor engagement strategies and any other important issues that will help prepare companies for their 2014 annual shareholder meeting. CLE credit will be available.

The speakers include:

  • Lydia Beebe, Corporate Secretary and Chief Governance Officer, Chevron Corporation
  • Ning Chiu, Counsel, Davis Polk & Wardwell LLP
  • Stephen L. Brown, Senior Director of Corporate Governance & Associate General Counsel, TIAA-CREF
  • Patrick McGurn, Executive Director, Institutional Shareholder Services (ISS)

The panel will be moderated by the NYSE’s Judy McLevey. Continue Reading

Investment Advisers and Investment Companies Oppose Rulemaking Petition to Shorten 13F Filing Deadlines

The Investment Adviser Association (IAA) and the Investment Company Institute (ICI) have written to the SEC, arguing against the rulemaking petition submitted by the NYSE, the Society of Corporate Secretaries and Governance Professionals, and the National Investor Relations Institute to change the deadline for 13F filings from 45 after the last day of each calendar quarter to two business days after the last day of each calendar quarter. We previously discussed the petition here.

The letters claim that the deadline change would increase free-riding, by allowing other investors to capitalize on investment managers’ investment ideas or replicate successful proprietary trading strategies. Continue Reading

NYSE IPO Companies Gain a Transition Period to Meet Internal Audit Requirements

Companies listing on the NYSE in connection with an IPO, carve-out or spinoff transaction will have a one-year transition period to comply with the NYSE internal audit requirements. The SEC approved the proposed NYSE rule change on August 22, 2013.

Section 303A.07(c) of the NYSE requires a listed company to have an internal audit function to provide management and the audit committee with ongoing assessments of the listed company’s risk management processes and system of internal control. In July, NYSE proposed a one-year transition period for IPO, carve-out and spinoff companies to be consistent with the one-year transition period currently available to any company transferring from another national securities exchange. Continue Reading

SEC Announces Further Delays to Ruling on Proposed NYSE Proxy Fee and Brokers’ Internet Platform Changes

The SEC has again decided that it needs more time before it can make a decision on a NYSE rule filing to change the fees paid by companies for proxy distribution, and has delayed its order until October 20, 2013.

24 comment letters were initially submitted after the NYSE filed a proposed rule change last year related to expense reimbursement by companies to brokers for processing proxy materials to shareholders holding securities in street name. In addition, the proposal attempted to establish a five-year fee for the development of an enhanced brokers Internet program.

In April, the SEC extended its decision and received 4 additional letters. Continue Reading

SEC Approves NYSE Proposal to Eliminate Separate Voting Standard

The SEC has approved, upon filing of the rule proposal last week, a NYSE proposal to eliminate its separate voting standards anytime shareholder approval is a prerequisite to the listing of any additional or new securities, including pursuant to equity compensation plans or for new shares in transactions. We previously discussed the proposed rule change in April on this post and the complexities related to the NYSE calculation working in conjunction with state law requirements. The rule filing was subsequently removed from the NYSE site but has now been approved and is already effective.

Prior to this rule change, Section 312.07 of the Listed Company Manual required approval by a majority of votes cast, subject to a quorum requirement that the total vote cast on the proposal must represent over 50% in interest of all securities entitled to vote. Continue Reading

Focusing on Compensation Committee Charters Part I – for NYSE Companies Only

Recently, we reminded companies of the upcoming deadlines related to the new listing exchanges’ rules on compensation committees in this client alert. In two separate posts, we talk about the required changes to committee charters. Kyoko Lin addresses questions in Part I of this post, which focuses specifically on NYSE listed companies. We will turn our attention to Nasdaq companies in Part II.

Can you summarize the amendments to the committee charters that are required by July 1?
NYSE listed companies must provide in their compensation committee charters the authorization for the committees to engage their own advisers and be directly responsible for the appointment, compensation and oversight of their work. Continue Reading

Update: NYSE Proposal to Eliminate Voting Standard Removed; Nasdaq FAQs Address Approval

The NYSE has removed its proposed rule filing to the SEC to eliminate its separate voting standard for matters requiring shareholder approval from its website, which we had previously discussed here.

Under Nasdaq, Rule 5635(e)(4) indicates that a “majority of the votes cast on the proposal must be voted in favor of the proposal” where Nasdaq requires shareholder approval. An FAQ indicates, however, that Nasdaq does not define the term “votes cast.” It expects companies to calculate the “votes cast” in accordance with its governing documents and any applicable state law. Continue Reading

NYSE Proposes to Eliminate Separate Voting Standard

Companies seeking approval of equity compensation plans as required under NYSE rules have often struggled to understand, and describe in proxy statements, the application of the NYSE voting standard alongside the state law provisions, for determining approval of the plan. The NYSE has now proposed to eliminate its own separate voting standard.

Where the NYSE makes shareholder approval a prerequisite to the listing of any additional or new securities, Section 312.07 mandates that the proposal obtain a minimum vote of a majority of votes cast, provided that the total vote cast on the proposal represents over 50% in interest of all securities entitled to vote on the proposal. Continue Reading

Ceres-Led Investor Group Proposes to Make Corporate Sustainability Disclosure Part of Listing Standards

Directed by Ceres, the Investor Network on Climate Risk (INCR) has published a consultation paper (free registration required) with recommendations for integrating sustainability disclosure requirements into listing rules. INCR includes notable investors such as BlackRock and others traditionally associated with being active on corporate social issues, including Boston Common Asset Management and the AFL-CIO.

The group is concerned that the ability to factor sustainability issues into investment decisions is difficult due to what they perceive as inconsistent and insufficient corporate reporting. In addition, INCR members have heard from companies that have been reluctant to report on sustainability that they are not certain what specific information investors need and how it will be used. Continue Reading

Securities Exchanges Rules Involving Risk Management Are Proposed and Debated

In another move that more closely aligns Nasdaq listing standards with those of the NYSE, Nasdaq has filed a proposed rule change with the SEC that would require its listed companies to have an internal audit function by December 31, 2013. Companies looking to be listed on Nasdaq after June 30, 2013 will need to put this in place prior to listing. The role may be handled internally or outsourced to a third party other than a company’s independent auditors. The proposal is subject to comments and SEC approval.

An internal audit function is identified in Nasdaq’s rule filing as being necessary to provide management and the audit committee with ongoing assessment of a company’s risk management processes and system of internal control. Continue Reading

Proxy Season Preparation for NYSE Companies

The NYSE sent a reminder to its U.S.-listed companies earlier this week, covering a range of regulatory requirements. The key points focused on the annual meeting and proxy statement include:

  • Using egovdirect to provide notification of the record date and meeting date to the Exchange, as we discussed here;
  • Giving the Exchange at least 10 calendar days prior notice of a record date, including any changes, and ensuring the record date is 30 calendar days from the meeting date as the Exchange recommends;
  • Sending broker search cards at least 20 business days before the record date, which the NYSE emphasizes is mandatory;
  • Sending three copies of the proxy materials (including the proxy card) to the Exchange at the same time when they are first sent to shareholders;
  • Confirming that the disclosure of voting standards in the proxy statement reflects the recent changes to NYSE rules on broker discretionary voting, which eliminated the ability for brokers to cast votes without instruction on many management proposals such as declassification, adopting majority voting, eliminating supermajority requirements, and providing the rights to call special meetings and action by consents.
Continue Reading

NYSE Amends Company Notification Rules with Focus on Use of egovdirect.com

The SEC recently approved amendments to the NYSE Listed Company Manual to provide a uniform method for companies to give notice to the NYSE when required to do so under various sections of the Manual.  Prior to these amendments, companies were permitted to provide notice of certain events using different methods that varied from section-to-section, and that in some cases asked for multiple notices (for example, telephone calls followed by faxes).  At least 3 sections still referred to sending notices by telegrams.  With particular relevance to the proxy season, the NYSE has also clarified that only 3 copies of the proxy statement (instead of 6) need to be sent at the same time they are issued to shareholders. Continue Reading

Additional Amendments to Proposed Listing Standards on Compensation Committees and Advisers

Both the NYSE and NASDAQ have filed further amendments to their proposed listing standards on compensation committees and their advisers. The amendments copy directly from the exception in Item 407(e)(3)(iii) of Regulation S-K with respect to the proxy disclosure rules for compensation consultants.

The amendments clarify that a compensation committee is not required to conduct the independence assessment of an adviser whose role is limited to (a) consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors, and that is available generally to all salaried employees or (b) providing information that either is not customized or that is customized based on parameters that are not developed by the adviser, and about which the adviser does not provide advice.   Continue Reading

Nasdaq Files Amendment to Proposal Governing Compensation Committees

Nasdaq has filed an amendment to its proposed listing standards with respect to compensation committees, as referred to in our recent post. The key provisions include:

  • Effective Dates.  Changing the date of effectiveness to July 1, 2013, rather than immediate effectiveness upon SEC approval, for when compensation committees must have the specific responsibilities for considering the independence of advisers and the authority necessary relating to the retention and oversight of those advisers. The effective dates of the provisions as to the compensation committee independence standards continue to be companies’ first annual meetings after January 15, 2014 or October 31, 2014.
Continue Reading

Commentators Raise Concerns with the SEC About Proposed Listing Standards for Compensation Committees

Most of the 15 comment letters on the proposed listing standards for compensation committees by the NYSE and Nasdaq focused on committee member independence. Some commentators, including AFSCME and Teamsters, argued that the standards do not go far enough and should include additional specified factors with respect to personal and business relationships between compensation committee members and senior management, directors fees and disclosed related party transactions. They also objected to Nasdaq’s proposal to retain the allowance for exceptional circumstances according to which a board may have a non-independent director serve on the compensation committee for up to two years. 

Two commentators, including the Society of Corporate Secretaries and Governance Professionals, questioned Nasdaq’s prohibition on the acceptance of consulting or other fees for determining compensation committee independence. Continue Reading

NYSE Webcast Panel Previews the 2013 Proxy Season 

Last week I participated in an NYSE-sponsored webcast hosted by Judy McLevey at the NYSE. Our panel discussed the issues that may affect the upcoming proxy season. The other panelists consisted of a group of recognized experts including Carol Bowie from ISS, Andrew Letts from State Street, Jim Parsons from Exxon Mobil, and Darla Stuckey from the Society of Corporate Secretaries and Governance Professionals.  An archive of the webcast is available here.  

Some of the main points reviewed included:  

New Policies and Investors’ Use of Proxy Advisory Firms.  Carol described the major parts of the new ISS policy updates and Darla discussed Glass Lewis changes.  Continue Reading

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