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, 39485-39486 [2017-17455]

Download as PDF Federal Register / Vol. 82, No. 159 / Friday, August 18, 2017 / Notices mstockstill on DSK30JT082PROD with NOTICES IM Liquidity Requirements’’ section of the Treasury Policy to reflect the proposed liquidity requirement changes, namely USD-denominated product requirements of 65% cash and/or U.S. Treasuries, and 35% remainder eligible U.S. cash, U.S. Treasuries, and/or Euro cash; and Euro-denominated product requirements of 100% U.S. cash, Euro cash, and/or U.S. Treasuries. The proposed changes also include removing reference to G7 cash and including U.S. Treasury securities, U.S. cash, and Euro cash as eligible collateral from the House IM and GF Liquidity Requirements (for Non-Client USD and Euro-denominated requirements) chart, the list of acceptable forms of collateral for IM, and the list of acceptable forms of collateral for the GF). III. Discussion and Commission Findings Section 19(b)(2)(C) of the Act 4 directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. Section 17A(b)(3)(F) of the Act 5 requires, among other things, that the rules of a registered clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions, to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible and, in general, to protect investors and the public interest. Rule 17Ad–22(d)(3) 6 requires that a registered clearing agency shall establish, implement, maintain and enforce written policies and procedures reasonably designed to hold assets in a manner that minimizes risk of loss or of delay in its access to them. The Commission finds that the proposed rule change, which removes JPY, GBP, and CAD from eligibility to meet IM and GF requirements, is consistent with Section 17A of the Act and Rule 17Ad–22 thereunder. According to ICC, ICC would need to convert JPY, GBP, and CAD into another currency in order to use them to satisfy obligations arising from the products that ICC clears, which are denominated only in USD or Euros. Therefore, from ICC’s perspective, JPY, GBP, and CAD are not as liquid as USD or Euros for 4 15 U.S.C. 78s(b)(2)(C). U.S.C. 78q–1(b)(3)(F). 6 17 CFR 240.17Ad–22(d)(3). 5 15 VerDate Sep<11>2014 17:47 Aug 17, 2017 Jkt 241001 purposes of ICC’s business activities. Moreover, ICC has noted that JPY has a significant timing issue related to conversion. ICC also expressed the view that, from a practical standpoint, these changes should have minimal impact on ICC’s financial resource composition because such currencies have been utilized rarely by Clearing Participants to meet IM and GF requirements. The Commission believes that, by removing JPY, GBP, and CAD as eligible forms of collateral that may be posted to ICC, ICC reduces the risk that ICC would not be able to meet its settlement or other liquidity obligations timely because of the need to convert one currency to another. The Commission therefore finds that the proposed revisions to the ICC Rules and Treasury Policy are designed to promote the prompt and accurate settlement of securities transactions, derivatives agreements, contracts, and transactions for which ICC is responsible, consistent with Section 17A(b)(3)(F) of the Exchange Act. Similarly the proposed changes are designed to allow ICC to hold collateral in forms that minimize the risk of loss or delay in accessing them by reducing the need for ICC to conduct currency conversions. The Commission therefore finds that the proposed revisions also are consistent with the requirements of Rule 17Ad–22(d)(3). IV. Conclusion It is therefore ordered pursuant to Section 19(b)(2) of the Act that the proposed rule change (SR–ICC–2017– 010) be, and hereby is, approved.7 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.8 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–17431 Filed 8–17–17; 8:45 am] BILLING CODE 8011–01–P 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. 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. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 81021 (June 26, 2017), 82 FR 29966 (‘‘Notice’’). 4 See Sections 202.05 (Timely Disclosure of Material News) and 202.06 (Procedure for Public Release of Information; Trading Halts) of the Manual. 2 17 7 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 8 17 CFR 200.30–3(a)(12). PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 39485 E:\FR\FM\18AUN1.SGM 18AUN1 39486 Federal Register / Vol. 82, No. 159 / Friday, August 18, 2017 / Notices mstockstill on DSK30JT082PROD with NOTICES 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 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 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. 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 VerDate Sep<11>2014 17:47 Aug 17, 2017 Jkt 241001 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. 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. 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 exdividend or ex-distribution, as well as requirements to set forth the brokers’ cut off dates for determining full and 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. 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). PO 00000 Frm 00083 Fmt 4703 Sfmt 9990 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2017–17455 Filed 8–17–17; 8:45 am] BILLING CODE 8011–01–P 12 15 13 17 E:\FR\FM\18AUN1.SGM U.S.C. 78f(b)(2). CFR 200.30–3(a)(12). 18AUN1

Agencies

[Federal Register Volume 82, Number 159 (Friday, August 18, 2017)]
[Notices]
[Pages 39485-39486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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.

---------------------------------------------------------------------------



    \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.

---------------------------------------------------------------------------



    \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
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