Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving a Proposed Rule Change Amending Its Continued Listing Requirements, as Set Forth in Section 802.01E of the Exchange's Listed Company Manual, in Relation to the Late Filing of a Company's Annual or Quarterly Report With the Securities and Exchange Commission, 12234-12238 [2015-05191]

Download as PDF 12234 Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices persons concerning whether the proposed rule change is inconsistent with Section 17A of the Exchange Act or any other provision of the Exchange Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval which would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b–4, any request for an opportunity to make an oral presentation.20 Interested persons are invited to submit written data, views, and arguments on or before March 27, 2015. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal on or before April 10, 2015. Comments may be submitted by any of the following methods: 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 such filings also will be available for inspection and copying at the principal office of OCC and on OCC’s Web site at https://www.theocc.com/components/ docs/legal/rules_and_bylaws/sr_occ_14_ 21.pdf. 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–OCC–2014–21 and should be submitted on or before March 27, 2015. If comments are received, any rebuttal comments should be submitted on or before April 10, 2015. Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– OCC–2014–21 on the subject line. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Brent J. Fields, Secretary. mstockstill on DSK4VPTVN1PROD with NOTICES Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–OCC–2014–21. 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 (https://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 20 Section 19(b)(2) of the Exchange Act, as amended by the Securities Acts Amendments of 1975, Pub. L. 94–29, 89 Stat. 97 (1975), grants the Commission flexibility to determine what type of proceeding—either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by a selfregulatory organization. See Securities Acts Amendments of 1975, Report of the Senate Committee on Banking, Housing and Urban Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). VerDate Sep<11>2014 18:59 Mar 05, 2015 Jkt 235001 [FR Doc. 2015–05160 Filed 3–5–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74412; File No. SR–NYSE– 2014–65] Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving a Proposed Rule Change Amending Its Continued Listing Requirements, as Set Forth in Section 802.01E of the Exchange’s Listed Company Manual, in Relation to the Late Filing of a Company’s Annual or Quarterly Report With the Securities and Exchange Commission March 2, 2015. I. Introduction On December 4, 2014, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend its continued listing requirements, set forth in section 802.01E of its Listed Company Manual, with respect to companies whose required annual or quarterly reports are late or defective. The proposed rule change was published for comment in 21 17 CFR 200.30–3(a)(57). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 the Federal Register on December 17, 2014.3 On January 30, 2015, the Commission designated a longer period for Commission action on the proposed rule change, until March 17, 2015.4 The Commission received no comments on the proposal. This order approves the proposed rule change. II. Description of the Proposal The Exchange proposes to amend section 802.01E of its Listed Company Manual (the ‘‘Late Filer Rule’’) to: (i) Expand the rule to impose a maximum period within which a company must file a late quarterly report on Form 10–Q in order to maintain its listing, and (ii) clarify the Exchange’s treatment of companies whose annual or quarterly reports are defective at the time of filing or become defective at some subsequent date. Currently, the Late Filer Rule deems a listed company to be delinquent in filing its annual report on Forms 10–K, 20–F, 40–F or N–CSR with the Commission if it fails to submit the filing by the date such report was required to be filed by the applicable form, or if a Form 12b–25 was timely filed with the Commission, the extended filing due date for the annual report. During the six-month period from the date of such delinquency, the Exchange monitors the company and the status of the delinquent annual report, including through contact with the company, until the filing delinquency is cured. If the company fails to cure such delinquency within the initial six-month period, the Exchange may, in its sole discretion, allow the company’s securities to be traded for up to an additional six-month period depending on the company’s specific circumstances. The Exchange will commence suspension and delisting procedures in accordance with Section 804.00 of the Listed Company Manual if the Exchange determines that an additional trading period of up to six months is not appropriate, or if the Exchange determines that an additional trading period of up to six months is appropriate and the company fails to file its annual report by the end of the additional period. A company is not currently subject to the compliance periods set forth in the Late Filer Rule in connection with a failure to timely file a quarterly report on Form 10–Q with the SEC.5 Moreover, 3 See Securities Exchange Act Release No. 73821 (December 11, 2014), 79 FR 75217 (‘‘Notice’’). 4 See Securities Exchange Act Release No. 74184, 80 FR 6558 (February 5, 2015). 5 While a company is not currently subject to the compliance periods in the Late Filer Rule in connection with the failure to timely file a Form E:\FR\FM\06MRN1.SGM 06MRN1 Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES the Late Filer Rule currently does not explicitly detail the Exchange’s treatment of companies whose annual or quarterly reports are defective. The Exchange has now proposed to amend its Late Filer Rule to add these elements. Specifically, the Exchange has proposed to amend its Late Filer Rule to explicitly state that, for purposes of remaining listed on the Exchange, a company would incur a filing delinquency and be subject to the procedures set forth in the amended rule on the date on which any of the following occurs: • The company fails to file its annual report or its quarterly report on Form 10–Q with the Commission by the date such report was required to be filed by the applicable form (or extended due date if a Form 12b–25 is timely filed with the Commission) (the ‘‘Filing Due Date,’’ and the failure to file a report by the applicable Filing Due Date, a ‘‘Late Filing Delinquency’’); • The company files its annual report without an audit report from its independent auditor for any or all of the periods included in such annual report (a ‘‘Required Audit Report’’ and the absence of a Required Audit Report, a ‘‘Required Audit Report Delinquency’’); • The company’s independent auditor withdraws a Required Audit Report or the company files a Form 8–K with the Commission pursuant to Item 4.02(b) thereof disclosing that it has been notified by its independent auditor that a Required Audit Report or completed interim review should no longer be relied upon (a ‘‘Required Audit Report Withdrawal Delinquency’’); or • The company files a Form 8–K with the Commission pursuant to Item 4.02(a) thereof to disclose that previously issued financial statements 10–Q, such companies are subject to the Exchange’s late filer (or ‘‘.LF’’) indicator process. The .LF indicator is appended to the company’s trading symbol as disseminated on the consolidated tape and to market data vendors, and the company’s name is included on the late filer list on the Exchange’s Web site. The .LF indicator and web posting commence five days after the due date or extended due date (if applicable) of the first late annual report or Form 10–Q (unless the company has submitted the required report within that five day period) and continue until the company becomes current again with respect to all required periodic reports. In addition, the Commission notes that a listed company is obligated to comply with the Exchange’s listing agreement, which requires, among other things, that the company file all required periodic financial reports with the SEC, including quarterly or semi-annual reports (and annual reports), by the due dates established by the SEC, and which states that the Exchange may, consistent with applicable laws and SEC rules, suspend a listed company’s securities and commence delisting proceedings upon failure of the company to comply with any one or more sections of the listing agreement. VerDate Sep<11>2014 18:59 Mar 05, 2015 Jkt 235001 should no longer be relied upon because of an error in such financial statements or, in the case of a foreign private issuer, makes a similar disclosure in a Form 6–K filed with the Commission or by other means (a ‘‘Non-Reliance Disclosure’’) and, in either case, the company does not refile all required corrected financial statements within 60 days of the issuance of the Non-Reliance Disclosure (an ‘‘Extended Non-Reliance Disclosure Event’’ and, together with a Late Filing Delinquency, a Required Audit Report Delinquency and a Required Audit Report Withdrawal Delinquency, a ‘‘Filing Delinquency’’) (for purposes of the cure periods described in the rule, an Extended NonReliance Disclosure Event would be deemed to have occurred on the date of original issuance of the Non-Reliance Disclosure); if the Exchange believes that a company is unlikely to refile all required corrected financial statements within 60 days after a Non-Reliance Disclosure or that the errors giving rise to such Non-Reliance Disclosure are particularly severe in nature, the Exchange may, in its sole discretion, determine earlier than 60 days that the applicable company has incurred a Filing Delinquency as a result of such Non-Reliance Disclosure.6 Additionally, under the proposed rule, the Exchange would deem a company to have incurred a Late Filing Delinquency if it submits an annual report or Form 10–Q to the Commission by the applicable Filing Due Date, but such filing fails to include an element required by the applicable form and the Exchange determines in its sole discretion that such deficiency is material in nature.7 6 See proposed section 802.01E of the Listed Company Manual (‘‘Manual’’). The proposed rule states that the annual report or Form 10–Q that gives rise to a Filing Delinquency shall be referred to therein as the ‘‘Delinquent Report.’’ Id. 7 Id. The Exchange states that the following is a non-exclusive list of elements that would cause the Exchange to deem the company to have incurred a Late Filing Delinquency: The filing does not include required financial statements or a required audit opinion; a required financial statement audit opinion includes qualifying or disclaiming language or the auditor provides an adverse financial statement audit opinion; a required financial statement audit opinion is unsigned or undated; there is a discrepancy between the period end date for required financial statements and the date cited in the related audit report; the company’s auditor has not conducted a SAS 100 review with respect to the company’s Form 10–Q; required chief executive officer or chief financial officer certifications are missing; a Sarbanes-Oxley Act section 404 required internal control report or auditor certification is missing; the filing does not comply with the applicable SEC XBRL requirements; or the filing does not include signatures of officers or directors required by the applicable form. See Notice, 79 FR at 75218 n.6. PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 12235 Upon the occurrence of a Filing Delinquency, the Exchange would promptly send written notification to a company of its procedures relating to late filings (the ‘‘Filing Delinquency Notification’’).8 As is the case under the current rule, within five days of the date of the Filing Delinquency Notification, the company would be required to contact the Exchange to discuss the status of the Delinquent Report and issue a press release disclosing the occurrence of the Filing Delinquency, the reason therefor, and (if known) the anticipated date such Filing Delinquency will be cured via the filing or refiling of the applicable report, as the case may be.9 During the six-month period from the date of the Filing Delinquency (the ‘‘Initial Cure Period’’), the Exchange would monitor the company and the status of the Delinquent Report and any subsequent annual report or quarterly report on Form 10–Q the company fails to file by the applicable Filing Due Date (a ‘‘Subsequent Report’’), through contact with the company, until the Filing Delinquency is cured.10 If the company fails to cure the Filing Delinquency within the Initial Cure Period, the Exchange may, in its sole discretion, allow the company’s securities to be traded for up to an additional six-month period (the ‘‘Additional Cure Period’’) depending on the company’s specific circumstances.11 If the Exchange determines that an Additional Cure Period is not appropriate, suspension and delisting procedures would commence in accordance with the procedures set out in section 804.00 of the Manual.12 A company would not be eligible to follow the procedures outlined in sections 802.02 and 802.03 with respect to this criterion.13 Notwithstanding the foregoing, however, under the proposed rule the 8 See proposed section 802.01E of the Manual. The Exchange states that it typically sends such notification within five business days. See Notice, 79 FR at 75218. 9 See proposed section 802.01E of the Manual. If the company has not issued the required press release within five days of the date of the Filing Delinquency Notification, the Exchange will issue a press release stating that the company has incurred a Filing Delinquency and providing a description thereof. Id. 10 Id. Under the proposed amended rule, a company that has an uncured Filing Delinquency would not incur an additional Filing Delinquency if it fails to file a Subsequent Report by the applicable Filing Due Date. However, in order for the company to cure its initial Filing Delinquency, no Subsequent Report may be delinquent or deficient on the date by which the initial Filing Delinquency is required to be cured. Id. 11 Id. 12 Id. 13 Id. E:\FR\FM\06MRN1.SGM 06MRN1 mstockstill on DSK4VPTVN1PROD with NOTICES 12236 Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices Exchange may in its sole discretion decide: (i) Not to afford a company any Initial Cure Period or Additional Cure Period, as the case may be, at all; or (ii) at any time during the Initial Cure Period or Additional Cure Period, as the case may be, to truncate the Initial Cure Period or Additional Cure Period, as the case may be, and immediately commence suspension and delisting procedures if the company is subject to delisting pursuant to any other provision of the Manual, including if the Exchange believes, in its sole discretion, that continued listing and trading of a company’s securities on the Exchange is inadvisable or unwarranted in accordance with sections 802.01A, 802.01B, 802.01C or 802.01D of the Manual.14 The Exchange may also commence suspension and delisting procedures if it believes, in its sole discretion, that it is advisable to do so based on an analysis of all relevant factors, including, but not limited to: • Whether there are allegations of financial fraud or other illegality in relation to the company’s financial reporting; • The resignation or termination by the company of the company’s independent auditor due to a disagreement; • Any extended delay in appointing a new independent auditor after a prior auditor’s resignation or termination; • The resignation of members of the company’s audit committee or other directors; • The resignation or termination of the company’s chief executive officer, chief financial officer or other key senior executives; • Any evidence that it may be impossible for the company to cure its Filing Delinquency within the cure periods otherwise available under the Late Filer Rule; and • Any past history of late filings.15 In determining whether an Additional Cure Period after the expiration of the Initial Cure Period is appropriate, the Exchange would, as is currently the case, consider the likelihood that the Delinquent Report and all Subsequent Reports can be filed or refiled, as applicable, during the Additional Cure Period, as well as the company’s general financial status, based on information provided by a variety of sources, including the company, its audit committee, its outside auditors, the staff of the SEC and any other regulatory body.16 Further, the Exchange, as it 14 Id. 15 Id. 16 Id. VerDate Sep<11>2014 18:59 Mar 05, 2015 Jkt 235001 currently does, would strongly encourage companies to provide ongoing disclosure on the status of the Delinquent Report and any Subsequent Reports to the market through press releases, and would also take the frequency and detail of such information into account in determining whether an Additional Cure Period is appropriate.17 As proposed, if the Exchange determines that an Additional Cure Period is appropriate and the company fails to file the Delinquent Report and all Subsequent Reports by the end of such additional period, suspension and delisting procedures would commence immediately in accordance with the procedures set out in section 804.00.18 In no event would the Exchange continue to trade a company’s securities if: (i) it has failed to cure its Filing Delinquency; and (ii) it is not current with all Subsequent Reports, on the date that is twelve months after its initial Filing Delinquency.19 The Exchange has proposed that its amended Late Filer Rule become operative on March 1, 2015.20 Accordingly, the current provisions of section 802.01E of the Manual would be applicable to any listed company that fails to timely file an annual report (Forms 10–K, 20–F, 40–F or N–CSR) prior to March 1, 2015.21 On or after March 1, 2015, any listed company that fails to timely file an annual report, or quarterly report on Form 10–Q, would be subject to the amended provisions of Section 802.01E.22 Any listed company that is late as of March 1, 2015, in filing a Form 10–Q with a due date prior to that date would not be subject to the proposed amended rule with respect to that filing; however, any such company would be subject to the proposed amended rule with respect to any periodic report it does not file on a timely basis with a due date that is on or after March 1, 2015.23 III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations 17 Id. 18 Id. 19 Id. See supra note 10. Notice, 79 FR at 75219. 21 Id. Both prior to and after March 1, 2015, the Exchange’s other continued listing standards would, of course, continue to apply, including the ability to suspend and delist if any other event or condition exists or occurs that makes further dealings or listing of the securities on the Exchange inadvisable or unwarranted. 22 Id. 23 Id. 20 See PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 thereunder applicable to a national securities exchange.24 In particular, the Commission finds that the proposed rule change is consistent with section 6(b)(5) of the Act,25 which requires, among other things, that the rules of a national securities exchange be designed 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 goal of ensuring that listed companies have filed accurate, up-to-date reports under the Act is of critical importance so that investors have reliable information upon which they can make informed investment decisions. For the same reason, it is also important that companies with stale or defective publicly filed financial information do not remain listed on a national securities exchange if such information is not brought up-to-date or the deficiency cured in a timely manner. The Commission previously stated its view that the NYSE should consider shortening the timeframes within which a company would be delisted for failing to file annual reports as well as extending such requirements to issuers that are late in filing their quarterly reports with the Commission.26 The Commission believes that the proposed rule change, by including quarterly reports, should help to prevent an undue amount of time from passing without the company’s annual or quarterly reports being provided to the marketplace. The Commission also believes that the proposed changes to section 802.01E of the Manual should help to ensure that companies cannot continue to trade for extended periods of time without making their annual and interim reports publicly available.27 In this regard, the 24 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). 25 15 U.S.C. 78f(b)(5). 26 See Securities Exchange Act Release No. 51777 (June 2, 2005), 70 FR 33573 (June 8, 2005). 27 The Commission notes that, although section 802.01E does not specifically provide for late filer treatment if a foreign private issuer fails to provide quarterly or semi-annual financial information, violation of section 802.01D could result in a foreign private issuer becoming subject to delisting. Specifically, section 802.01D provides that a listed company could be subject to delisting under sections 802.02 and 802.03 for ‘‘failure of a company to make timely, adequate, and accurate disclosures of information to its shareholders and the investing public.’’ The Commission believes E:\FR\FM\06MRN1.SGM 06MRN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices Commission notes that the proposed rule change should help reduce those situations in which investors continuously have outdated or stale financial information upon which to base their investment decisions. As is discussed above, a company that has an uncured Filing Delinquency would not be able to cure the Filing Delinquency until all subsequent annual or quarterly reports that are delinquent have been filed.28 In other words, once it is a delinquent filer, a company can only become current in its filings if all of its annual and quarterly filings have been submitted to the SEC within 12 months of the first Filing Delinquency. Under the current rule by contrast, only annual reports trigger the suspension and delisting procedures of section 802.01E of the Manual. Furthermore, a listed company that demonstrates a history of delinquent filings could still be subject to delisting under the proposed rule change without the Exchange affording it any cure period at all (or at any time during an initial or additional cure period) as a result of the Exchange’s ability to commence suspension and delisting procedures based on a company’s ‘‘past history of late filings.’’ 29 The Commission believes these provisions will enable the Exchange to delist those companies that have demonstrated a history of providing outdated or stale financial information to investors and help the Exchange address the situation where a company becomes current within 12 months and then a short while later, such as by the next Commission filing date, incurs another Filing Delinquency. In such a case, the Commission would be concerned that investors continue to rely on outdated information and do not have current financial information on a timely basis in which to make their trading and investment decisions. The Commission believes that the proposal is reasonably designed to further these goals of investor protection and therefore is consistent with the Act and section 6(b)(5) thereunder. Additionally, by clearly stating that the Exchange’s Late Filer Rule applies not only to companies that file late or defective annual reports but also broadening the delisting procedures to include listed companies that file late or defective quarterly reports, the Commission believes that the proposal should benefit the public interest and protect investors by helping to assure that failure by a listed company to make interim financial disclosures, on at least a semi-annual basis, would meet this definition. 28 See supra note 10. 29 See supra note 15 and accompanying text. VerDate Sep<11>2014 18:59 Mar 05, 2015 Jkt 235001 that a larger segment of the financial information investors may rely upon when deciding whether to invest in a company listed on the Exchange is upto-date and accurate. Further, by detailing what the Exchange considers to be a defective annual or quarterly report and how the Exchange treats listed companies whose filed reports suffer from a deficiency, the Commission believes that the proposed rule change promotes just and equitable principles of trade by providing additional transparency to listed companies as to what could cause them to become subject to the section 802.01E delisting procedures for a late or deficient filing. For example, as noted above, Exchange rules will be clear that a company that files an 8-K pursuant to Item 4.02(b) thereof and has a Required Audit Report Withdrawal Delinquency will be subject to the procedures in section 802.01E and can only be extended a maximum of 12 months to cure the delinquency. Moreover, and importantly, this additional transparency, as well as the more stringent requirements set forth in the amended rule, could encourage listed companies to take extra care to ensure that their filed reports are timely and accurate, which would protect investors and the public interest. To the extent this occurs, the Commission believes that the proposal also has the potential to enhance the reliability of reports filed by companies listed on the Exchange as well as investor confidence in such reports, which should help to perfect the mechanism of a free and open market. The new rules also give the Exchange discretion in certain areas when a filing fails to include an element required by the applicable Commission form and the Exchange determines in in its sole discretion that such deficiency is material in nature. The rule filing provided a non-exclusive list of elements that, if missing from a filing, would cause the Exchange to deem the company to have incurred a Filing Delinquency. The Exchange stated in its rule filing that, in making this determination, it would not be making any judgments as to the sufficiency of the filing in question for purposes of compliance with Commission rules, but rather only for purposes of compliance with Exchange rules. The Commission emphasizes that any determination by the Exchange that a missing element is not material for purposes of a Filing Delinquency has no effect on the company’s compliance with Commission rules. The Commission further notes that while there is a PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 12237 provision in the new rules concerning a listed company that files an 8–K or 6– K announcing a Non-Reliance Disclosure having 60 days to correct its financial statements, the proposal makes clear that the Filing Delinquency will date from the original announcement of the Non-Reliance Disclosure if it is not cured within 60 days. This will ensure that the period for curing a NonReliance Disclosure will not extend past the 12 month period given to listed companies that have had another type of Filing Delinquency. Finally, the Commission notes that the time periods allowed to cure a Filing Delinquency are maximums for purposes of continued listing. The new provisions being adopted provide additional transparency to investors and the marketplace but also give the Exchange discretion to analyze the particular case and consider whether it is appropriate to commence suspension and delisting procedures immediately based on the particular facts, as well giving the Exchange discretion to grant an additional six month cure period, or shorten any time periods previously given. The new rules provide additional transparency by setting forth certain factors that may cause immediate delisting or shortened periods, such as resignation of a company’s chief executive officer, financial officer or members of the audit committee; allegations of fraud or other illegality in relation to financial reporting; and past history of late filings. We expect the Exchange to carefully review each Filing Deficiency and ensure that the public interest is being served by continued trading. As noted above, the importance of timely and complete Commission filings to ensure that investors and the marketplace have accurate and up-todate information about publicly traded companies is of extreme importance for confidence in our public markets.30 IV. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act,31 that the proposed rule change (SR–NYSE–2014– 65) be, and it hereby is, approved. 30 As noted above, the Exchange strongly encourages companies to provide ongoing disclosure on the status of the Delinquent Report and any Subsequent Reports to the market through press releases, and would also take the frequency and detail of such information into account in determining whether an Additional Cure Period is appropriate. The Commission believes such disclosures are very important to the marketplace during the delinquency period. 31 15 U.S.C. 78s(b)(2). E:\FR\FM\06MRN1.SGM 06MRN1 12238 Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.32 Brent J. Fields, Secretary. [FR Doc. 2015–05191 Filed 3–5–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IC–31490] Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940 February 27, 2015. The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of February 2015. A copy of each application may be obtained via the Commission’s Web site by searching for the file number, or for an applicant using the Company name box, at https://www.sec.gov/search/ search.htm or by calling (202) 551– 8090. An order granting each application will be issued unless the SEC orders a hearing. Interested persons may request a hearing on any application by writing to the SEC’s Secretary at the address below and serving the relevant applicant with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on March 24, 2015, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to Rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. The Commission: Brent J. Fields, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. ADDRESSES: mstockstill on DSK4VPTVN1PROD with NOTICES FOR FURTHER INFORMATION CONTACT: Diane L. Titus at (202) 551–6810, SEC, Division of Investment Management, Chief Counsel’s Office, 100 F Street NE., Washington, DC 20549–8010. 32 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:59 Mar 05, 2015 Jkt 235001 Gottex Multi-Asset Endowment Fund— II [File No. 811–22412]; Gottex MultiAsset Endowment Fund—I [File No. 811–22413]; Gottex Multi-Asset Endowment Master Fund [File No. 811– 22415] Summary: Each applicant, a closedend investment company, seeks an order declaring that it has ceased to be an investment company. On February 2, 2015, each applicant made a final liquidating distribution to its shareholders, based on net asset value. Applicants have retained approximately $144,877, $80,148 and $271,414, respectively, to pay shareholders their remaining balances and to pay applicants’ remaining expenses. Expenses of $2,300, $2,300 and $9,900, respectively, incurred in connection with the liquidations were paid by applicants. Filing Date: The applications were filed on February 4, 2015. Applicants’ Address: One Boston Place, Ste. 2600, 201 Washington St., Boston, MA 02109. Highland Special Situations Fund [File No. 811–21769] Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant transferred its assets to Highland Opportunistic Credit Fund, a series of Highland Funds I, and on July 1, 2014, made a distribution to its shareholders, based on net asset value. Expenses of approximately $312,224 incurred in connection with the reorganization were paid by the acquiring fund. Filing Date: The application was filed on February 2, 2015. Applicant’s Address: 200 Crescent Court, Ste. 700, Dallas, TX 75201. Invesco Municipal Income Opportunities Trust II [File No. 811– 5793]; Invesco Municipal Income Opportunities Trust III [File No. 811– 6052] Summary: Each applicant, a closedend investment company, seeks an order declaring that it has ceased to be an investment company. Applicants transferred their assets to Invesco Municipal Income Opportunities Trust, and on August 27, 2012, made distributions to their shareholders Income Opportunities Trust, and on August 27, 2012, made distributions to their shareholders based on net asset value. Expenses of $199,316, and $183,131, respectively, incurred in connection with the reorganizations were paid by Invesco Advisers, Inc., applicants’ investment adviser. PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 Filing Date: The applications were filed on February 4, 2015. Applicants’ Address: 1555 Peachtree St. NE., Ste. 1800, Atlanta, GA 30309. Invesco Municipal Premium Income Trust [File No. 811–5688]; Invesco Van Kampen Trust for Value Municipals [File No. 811–6472]; Invesco Van Kampen Select Sector Municipal Trust [File No. 811–8000] Summary: Each applicant, a closedend investment company, seeks an order declaring that it has ceased to be an investment company. Applicants transferred their assets to Invesco Van Kampen Municipal Opportunity Trust (now known as Invesco Municipal Opportunity Trust), and on October 15, 2012, made distributions to their shareholders based on net asset value. Expenses of $194,646, $203,231, and $203,911, respectively, incurred in connection with the reorganizations were paid by Invesco Advisers, Inc., applicants’ investment adviser. Filing Date: The applications were filed on February 4, 2015. Applicants’ Address: 1555 Peachtree St. NE., Ste. 1800, Atlanta, GA 30309. Invesco Value Municipal Trust [File No. 811–6434]; Invesco Value Municipal Securities [File No. 811– 7109] Summary: Each applicant, a closedend investment company, seeks an order declaring that it has ceased to be an investment company. Applicants transferred their assets to Invesco Value Municipal Income Trust, and on October 15, 2012, made distributions to their shareholders based on net asset value. Expenses of $175,385 and $152,464, respectively, incurred in connection with the reorganizations were paid by Invesco Advisers, Inc., applicants’ investment adviser. Filing Date: The applications were filed on February 4, 2015. Applicants’ Address: 1555 Peachtree St. NE., Ste. 1800, Atlanta, GA 30309. Invesco Value Municipal Bond Trust [File No. 811–6053] Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant transferred its assets to Invesco Value Municipal Income Trust, and on October 15, 2012, made a distribution to its shareholders based on net asset value. Expenses of $148,082 incurred in connection with the reorganization were paid by applicant. Filing Date: The application was filed on February 4, 2015. E:\FR\FM\06MRN1.SGM 06MRN1

Agencies

[Federal Register Volume 80, Number 44 (Friday, March 6, 2015)]
[Notices]
[Pages 12234-12238]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-05191]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74412; File No. SR-NYSE-2014-65]


Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving a Proposed Rule Change Amending Its Continued Listing 
Requirements, as Set Forth in Section 802.01E of the Exchange's Listed 
Company Manual, in Relation to the Late Filing of a Company's Annual or 
Quarterly Report With the Securities and Exchange Commission

March 2, 2015.

I. Introduction

    On December 4, 2014, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend its continued listing 
requirements, set forth in section 802.01E of its Listed Company 
Manual, with respect to companies whose required annual or quarterly 
reports are late or defective. The proposed rule change was published 
for comment in the Federal Register on December 17, 2014.\3\ On January 
30, 2015, the Commission designated a longer period for Commission 
action on the proposed rule change, until March 17, 2015.\4\ The 
Commission received no comments on 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. 73821 (December 11, 
2014), 79 FR 75217 (``Notice'').
    \4\ See Securities Exchange Act Release No. 74184, 80 FR 6558 
(February 5, 2015).
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II. Description of the Proposal

    The Exchange proposes to amend section 802.01E of its Listed 
Company Manual (the ``Late Filer Rule'') to: (i) Expand the rule to 
impose a maximum period within which a company must file a late 
quarterly report on Form 10-Q in order to maintain its listing, and 
(ii) clarify the Exchange's treatment of companies whose annual or 
quarterly reports are defective at the time of filing or become 
defective at some subsequent date.
    Currently, the Late Filer Rule deems a listed company to be 
delinquent in filing its annual report on Forms 10-K, 20-F, 40-F or N-
CSR with the Commission if it fails to submit the filing by the date 
such report was required to be filed by the applicable form, or if a 
Form 12b-25 was timely filed with the Commission, the extended filing 
due date for the annual report. During the six-month period from the 
date of such delinquency, the Exchange monitors the company and the 
status of the delinquent annual report, including through contact with 
the company, until the filing delinquency is cured. If the company 
fails to cure such delinquency within the initial six-month period, the 
Exchange may, in its sole discretion, allow the company's securities to 
be traded for up to an additional six-month period depending on the 
company's specific circumstances. The Exchange will commence suspension 
and delisting procedures in accordance with Section 804.00 of the 
Listed Company Manual if the Exchange determines that an additional 
trading period of up to six months is not appropriate, or if the 
Exchange determines that an additional trading period of up to six 
months is appropriate and the company fails to file its annual report 
by the end of the additional period.
    A company is not currently subject to the compliance periods set 
forth in the Late Filer Rule in connection with a failure to timely 
file a quarterly report on Form 10-Q with the SEC.\5\ Moreover,

[[Page 12235]]

the Late Filer Rule currently does not explicitly detail the Exchange's 
treatment of companies whose annual or quarterly reports are defective. 
The Exchange has now proposed to amend its Late Filer Rule to add these 
elements.
---------------------------------------------------------------------------

    \5\ While a company is not currently subject to the compliance 
periods in the Late Filer Rule in connection with the failure to 
timely file a Form 10-Q, such companies are subject to the 
Exchange's late filer (or ``.LF'') indicator process. The .LF 
indicator is appended to the company's trading symbol as 
disseminated on the consolidated tape and to market data vendors, 
and the company's name is included on the late filer list on the 
Exchange's Web site. The .LF indicator and web posting commence five 
days after the due date or extended due date (if applicable) of the 
first late annual report or Form 10-Q (unless the company has 
submitted the required report within that five day period) and 
continue until the company becomes current again with respect to all 
required periodic reports. In addition, the Commission notes that a 
listed company is obligated to comply with the Exchange's listing 
agreement, which requires, among other things, that the company file 
all required periodic financial reports with the SEC, including 
quarterly or semi-annual reports (and annual reports), by the due 
dates established by the SEC, and which states that the Exchange 
may, consistent with applicable laws and SEC rules, suspend a listed 
company's securities and commence delisting proceedings upon failure 
of the company to comply with any one or more sections of the 
listing agreement.
---------------------------------------------------------------------------

    Specifically, the Exchange has proposed to amend its Late Filer 
Rule to explicitly state that, for purposes of remaining listed on the 
Exchange, a company would incur a filing delinquency and be subject to 
the procedures set forth in the amended rule on the date on which any 
of the following occurs:
     The company fails to file its annual report or its 
quarterly report on Form 10-Q with the Commission by the date such 
report was required to be filed by the applicable form (or extended due 
date if a Form 12b-25 is timely filed with the Commission) (the 
``Filing Due Date,'' and the failure to file a report by the applicable 
Filing Due Date, a ``Late Filing Delinquency'');
     The company files its annual report without an audit 
report from its independent auditor for any or all of the periods 
included in such annual report (a ``Required Audit Report'' and the 
absence of a Required Audit Report, a ``Required Audit Report 
Delinquency'');
     The company's independent auditor withdraws a Required 
Audit Report or the company files a Form 8-K with the Commission 
pursuant to Item 4.02(b) thereof disclosing that it has been notified 
by its independent auditor that a Required Audit Report or completed 
interim review should no longer be relied upon (a ``Required Audit 
Report Withdrawal Delinquency''); or
     The company files a Form 8-K with the Commission pursuant 
to Item 4.02(a) thereof to disclose that previously issued financial 
statements should no longer be relied upon because of an error in such 
financial statements or, in the case of a foreign private issuer, makes 
a similar disclosure in a Form 6-K filed with the Commission or by 
other means (a ``Non-Reliance Disclosure'') and, in either case, the 
company does not refile all required corrected financial statements 
within 60 days of the issuance of the Non-Reliance Disclosure (an 
``Extended Non-Reliance Disclosure Event'' and, together with a Late 
Filing Delinquency, a Required Audit Report Delinquency and a Required 
Audit Report Withdrawal Delinquency, a ``Filing Delinquency'') (for 
purposes of the cure periods described in the rule, an Extended Non-
Reliance Disclosure Event would be deemed to have occurred on the date 
of original issuance of the Non-Reliance Disclosure); if the Exchange 
believes that a company is unlikely to refile all required corrected 
financial statements within 60 days after a Non-Reliance Disclosure or 
that the errors giving rise to such Non-Reliance Disclosure are 
particularly severe in nature, the Exchange may, in its sole 
discretion, determine earlier than 60 days that the applicable company 
has incurred a Filing Delinquency as a result of such Non-Reliance 
Disclosure.\6\
---------------------------------------------------------------------------

    \6\ See proposed section 802.01E of the Listed Company Manual 
(``Manual''). The proposed rule states that the annual report or 
Form 10-Q that gives rise to a Filing Delinquency shall be referred 
to therein as the ``Delinquent Report.'' Id.

Additionally, under the proposed rule, the Exchange would deem a 
company to have incurred a Late Filing Delinquency if it submits an 
annual report or Form 10-Q to the Commission by the applicable Filing 
Due Date, but such filing fails to include an element required by the 
applicable form and the Exchange determines in its sole discretion that 
such deficiency is material in nature.\7\
---------------------------------------------------------------------------

    \7\ Id. The Exchange states that the following is a non-
exclusive list of elements that would cause the Exchange to deem the 
company to have incurred a Late Filing Delinquency: The filing does 
not include required financial statements or a required audit 
opinion; a required financial statement audit opinion includes 
qualifying or disclaiming language or the auditor provides an 
adverse financial statement audit opinion; a required financial 
statement audit opinion is unsigned or undated; there is a 
discrepancy between the period end date for required financial 
statements and the date cited in the related audit report; the 
company's auditor has not conducted a SAS 100 review with respect to 
the company's Form 10-Q; required chief executive officer or chief 
financial officer certifications are missing; a Sarbanes-Oxley Act 
section 404 required internal control report or auditor 
certification is missing; the filing does not comply with the 
applicable SEC XBRL requirements; or the filing does not include 
signatures of officers or directors required by the applicable form. 
See Notice, 79 FR at 75218 n.6.
---------------------------------------------------------------------------

    Upon the occurrence of a Filing Delinquency, the Exchange would 
promptly send written notification to a company of its procedures 
relating to late filings (the ``Filing Delinquency Notification'').\8\ 
As is the case under the current rule, within five days of the date of 
the Filing Delinquency Notification, the company would be required to 
contact the Exchange to discuss the status of the Delinquent Report and 
issue a press release disclosing the occurrence of the Filing 
Delinquency, the reason therefor, and (if known) the anticipated date 
such Filing Delinquency will be cured via the filing or refiling of the 
applicable report, as the case may be.\9\
---------------------------------------------------------------------------

    \8\ See proposed section 802.01E of the Manual. The Exchange 
states that it typically sends such notification within five 
business days. See Notice, 79 FR at 75218.
    \9\ See proposed section 802.01E of the Manual. If the company 
has not issued the required press release within five days of the 
date of the Filing Delinquency Notification, the Exchange will issue 
a press release stating that the company has incurred a Filing 
Delinquency and providing a description thereof. Id.
---------------------------------------------------------------------------

    During the six-month period from the date of the Filing Delinquency 
(the ``Initial Cure Period''), the Exchange would monitor the company 
and the status of the Delinquent Report and any subsequent annual 
report or quarterly report on Form 10-Q the company fails to file by 
the applicable Filing Due Date (a ``Subsequent Report''), through 
contact with the company, until the Filing Delinquency is cured.\10\ If 
the company fails to cure the Filing Delinquency within the Initial 
Cure Period, the Exchange may, in its sole discretion, allow the 
company's securities to be traded for up to an additional six-month 
period (the ``Additional Cure Period'') depending on the company's 
specific circumstances.\11\ If the Exchange determines that an 
Additional Cure Period is not appropriate, suspension and delisting 
procedures would commence in accordance with the procedures set out in 
section 804.00 of the Manual.\12\ A company would not be eligible to 
follow the procedures outlined in sections 802.02 and 802.03 with 
respect to this criterion.\13\ Notwithstanding the foregoing, however, 
under the proposed rule the

[[Page 12236]]

Exchange may in its sole discretion decide: (i) Not to afford a company 
any Initial Cure Period or Additional Cure Period, as the case may be, 
at all; or (ii) at any time during the Initial Cure Period or 
Additional Cure Period, as the case may be, to truncate the Initial 
Cure Period or Additional Cure Period, as the case may be, and 
immediately commence suspension and delisting procedures if the company 
is subject to delisting pursuant to any other provision of the Manual, 
including if the Exchange believes, in its sole discretion, that 
continued listing and trading of a company's securities on the Exchange 
is inadvisable or unwarranted in accordance with sections 802.01A, 
802.01B, 802.01C or 802.01D of the Manual.\14\
---------------------------------------------------------------------------

    \10\ Id. Under the proposed amended rule, a company that has an 
uncured Filing Delinquency would not incur an additional Filing 
Delinquency if it fails to file a Subsequent Report by the 
applicable Filing Due Date. However, in order for the company to 
cure its initial Filing Delinquency, no Subsequent Report may be 
delinquent or deficient on the date by which the initial Filing 
Delinquency is required to be cured. Id.
    \11\ Id.
    \12\ Id.
    \13\ Id.
    \14\ Id.
---------------------------------------------------------------------------

    The Exchange may also commence suspension and delisting procedures 
if it believes, in its sole discretion, that it is advisable to do so 
based on an analysis of all relevant factors, including, but not 
limited to:
     Whether there are allegations of financial fraud or other 
illegality in relation to the company's financial reporting;
     The resignation or termination by the company of the 
company's independent auditor due to a disagreement;
     Any extended delay in appointing a new independent auditor 
after a prior auditor's resignation or termination;
     The resignation of members of the company's audit 
committee or other directors;
     The resignation or termination of the company's chief 
executive officer, chief financial officer or other key senior 
executives;
     Any evidence that it may be impossible for the company to 
cure its Filing Delinquency within the cure periods otherwise available 
under the Late Filer Rule; and
     Any past history of late filings.\15\
---------------------------------------------------------------------------

    \15\ Id.
---------------------------------------------------------------------------

    In determining whether an Additional Cure Period after the 
expiration of the Initial Cure Period is appropriate, the Exchange 
would, as is currently the case, consider the likelihood that the 
Delinquent Report and all Subsequent Reports can be filed or refiled, 
as applicable, during the Additional Cure Period, as well as the 
company's general financial status, based on information provided by a 
variety of sources, including the company, its audit committee, its 
outside auditors, the staff of the SEC and any other regulatory 
body.\16\ Further, the Exchange, as it currently does, would strongly 
encourage companies to provide ongoing disclosure on the status of the 
Delinquent Report and any Subsequent Reports to the market through 
press releases, and would also take the frequency and detail of such 
information into account in determining whether an Additional Cure 
Period is appropriate.\17\
---------------------------------------------------------------------------

    \16\ Id.
    \17\ Id.
---------------------------------------------------------------------------

    As proposed, if the Exchange determines that an Additional Cure 
Period is appropriate and the company fails to file the Delinquent 
Report and all Subsequent Reports by the end of such additional period, 
suspension and delisting procedures would commence immediately in 
accordance with the procedures set out in section 804.00.\18\ In no 
event would the Exchange continue to trade a company's securities if: 
(i) it has failed to cure its Filing Delinquency; and (ii) it is not 
current with all Subsequent Reports, on the date that is twelve months 
after its initial Filing Delinquency.\19\
---------------------------------------------------------------------------

    \18\ Id.
    \19\ Id. See supra note 10.
---------------------------------------------------------------------------

    The Exchange has proposed that its amended Late Filer Rule become 
operative on March 1, 2015.\20\ Accordingly, the current provisions of 
section 802.01E of the Manual would be applicable to any listed company 
that fails to timely file an annual report (Forms 10-K, 20-F, 40-F or 
N-CSR) prior to March 1, 2015.\21\ On or after March 1, 2015, any 
listed company that fails to timely file an annual report, or quarterly 
report on Form 10-Q, would be subject to the amended provisions of 
Section 802.01E.\22\ Any listed company that is late as of March 1, 
2015, in filing a Form 10-Q with a due date prior to that date would 
not be subject to the proposed amended rule with respect to that 
filing; however, any such company would be subject to the proposed 
amended rule with respect to any periodic report it does not file on a 
timely basis with a due date that is on or after March 1, 2015.\23\
---------------------------------------------------------------------------

    \20\ See Notice, 79 FR at 75219.
    \21\ Id. Both prior to and after March 1, 2015, the Exchange's 
other continued listing standards would, of course, continue to 
apply, including the ability to suspend and delist if any other 
event or condition exists or occurs that makes further dealings or 
listing of the securities on the Exchange inadvisable or 
unwarranted.
    \22\ Id.
    \23\ Id.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities 
exchange.\24\ In particular, the Commission finds that the proposed 
rule change is consistent with section 6(b)(5) of the Act,\25\ which 
requires, among other things, that the rules of a national securities 
exchange be designed 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.
---------------------------------------------------------------------------

    \24\ 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).
    \25\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the goal of ensuring that listed 
companies have filed accurate, up-to-date reports under the Act is of 
critical importance so that investors have reliable information upon 
which they can make informed investment decisions. For the same reason, 
it is also important that companies with stale or defective publicly 
filed financial information do not remain listed on a national 
securities exchange if such information is not brought up-to-date or 
the deficiency cured in a timely manner. The Commission previously 
stated its view that the NYSE should consider shortening the timeframes 
within which a company would be delisted for failing to file annual 
reports as well as extending such requirements to issuers that are late 
in filing their quarterly reports with the Commission.\26\ The 
Commission believes that the proposed rule change, by including 
quarterly reports, should help to prevent an undue amount of time from 
passing without the company's annual or quarterly reports being 
provided to the marketplace.
---------------------------------------------------------------------------

    \26\ See Securities Exchange Act Release No. 51777 (June 2, 
2005), 70 FR 33573 (June 8, 2005).
---------------------------------------------------------------------------

    The Commission also believes that the proposed changes to section 
802.01E of the Manual should help to ensure that companies cannot 
continue to trade for extended periods of time without making their 
annual and interim reports publicly available.\27\ In this regard, the

[[Page 12237]]

Commission notes that the proposed rule change should help reduce those 
situations in which investors continuously have outdated or stale 
financial information upon which to base their investment decisions. As 
is discussed above, a company that has an uncured Filing Delinquency 
would not be able to cure the Filing Delinquency until all subsequent 
annual or quarterly reports that are delinquent have been filed.\28\ In 
other words, once it is a delinquent filer, a company can only become 
current in its filings if all of its annual and quarterly filings have 
been submitted to the SEC within 12 months of the first Filing 
Delinquency. Under the current rule by contrast, only annual reports 
trigger the suspension and delisting procedures of section 802.01E of 
the Manual. Furthermore, a listed company that demonstrates a history 
of delinquent filings could still be subject to delisting under the 
proposed rule change without the Exchange affording it any cure period 
at all (or at any time during an initial or additional cure period) as 
a result of the Exchange's ability to commence suspension and delisting 
procedures based on a company's ``past history of late filings.'' \29\ 
The Commission believes these provisions will enable the Exchange to 
delist those companies that have demonstrated a history of providing 
outdated or stale financial information to investors and help the 
Exchange address the situation where a company becomes current within 
12 months and then a short while later, such as by the next Commission 
filing date, incurs another Filing Delinquency. In such a case, the 
Commission would be concerned that investors continue to rely on 
outdated information and do not have current financial information on a 
timely basis in which to make their trading and investment decisions. 
The Commission believes that the proposal is reasonably designed to 
further these goals of investor protection and therefore is consistent 
with the Act and section 6(b)(5) thereunder.
---------------------------------------------------------------------------

    \27\ The Commission notes that, although section 802.01E does 
not specifically provide for late filer treatment if a foreign 
private issuer fails to provide quarterly or semi-annual financial 
information, violation of section 802.01D could result in a foreign 
private issuer becoming subject to delisting. Specifically, section 
802.01D provides that a listed company could be subject to delisting 
under sections 802.02 and 802.03 for ``failure of a company to make 
timely, adequate, and accurate disclosures of information to its 
shareholders and the investing public.'' The Commission believes 
that failure by a listed company to make interim financial 
disclosures, on at least a semi-annual basis, would meet this 
definition.
    \28\ See supra note 10.
    \29\ See supra note 15 and accompanying text.
---------------------------------------------------------------------------

    Additionally, by clearly stating that the Exchange's Late Filer 
Rule applies not only to companies that file late or defective annual 
reports but also broadening the delisting procedures to include listed 
companies that file late or defective quarterly reports, the Commission 
believes that the proposal should benefit the public interest and 
protect investors by helping to assure that a larger segment of the 
financial information investors may rely upon when deciding whether to 
invest in a company listed on the Exchange is up-to-date and accurate. 
Further, by detailing what the Exchange considers to be a defective 
annual or quarterly report and how the Exchange treats listed companies 
whose filed reports suffer from a deficiency, the Commission believes 
that the proposed rule change promotes just and equitable principles of 
trade by providing additional transparency to listed companies as to 
what could cause them to become subject to the section 802.01E 
delisting procedures for a late or deficient filing. For example, as 
noted above, Exchange rules will be clear that a company that files an 
8-K pursuant to Item 4.02(b) thereof and has a Required Audit Report 
Withdrawal Delinquency will be subject to the procedures in section 
802.01E and can only be extended a maximum of 12 months to cure the 
delinquency. Moreover, and importantly, this additional transparency, 
as well as the more stringent requirements set forth in the amended 
rule, could encourage listed companies to take extra care to ensure 
that their filed reports are timely and accurate, which would protect 
investors and the public interest. To the extent this occurs, the 
Commission believes that the proposal also has the potential to enhance 
the reliability of reports filed by companies listed on the Exchange as 
well as investor confidence in such reports, which should help to 
perfect the mechanism of a free and open market.
    The new rules also give the Exchange discretion in certain areas 
when a filing fails to include an element required by the applicable 
Commission form and the Exchange determines in in its sole discretion 
that such deficiency is material in nature. The rule filing provided a 
non-exclusive list of elements that, if missing from a filing, would 
cause the Exchange to deem the company to have incurred a Filing 
Delinquency. The Exchange stated in its rule filing that, in making 
this determination, it would not be making any judgments as to the 
sufficiency of the filing in question for purposes of compliance with 
Commission rules, but rather only for purposes of compliance with 
Exchange rules. The Commission emphasizes that any determination by the 
Exchange that a missing element is not material for purposes of a 
Filing Delinquency has no effect on the company's compliance with 
Commission rules. The Commission further notes that while there is a 
provision in the new rules concerning a listed company that files an 8-
K or 6-K announcing a Non-Reliance Disclosure having 60 days to correct 
its financial statements, the proposal makes clear that the Filing 
Delinquency will date from the original announcement of the Non-
Reliance Disclosure if it is not cured within 60 days. This will ensure 
that the period for curing a Non-Reliance Disclosure will not extend 
past the 12 month period given to listed companies that have had 
another type of Filing Delinquency.
    Finally, the Commission notes that the time periods allowed to cure 
a Filing Delinquency are maximums for purposes of continued listing. 
The new provisions being adopted provide additional transparency to 
investors and the marketplace but also give the Exchange discretion to 
analyze the particular case and consider whether it is appropriate to 
commence suspension and delisting procedures immediately based on the 
particular facts, as well giving the Exchange discretion to grant an 
additional six month cure period, or shorten any time periods 
previously given. The new rules provide additional transparency by 
setting forth certain factors that may cause immediate delisting or 
shortened periods, such as resignation of a company's chief executive 
officer, financial officer or members of the audit committee; 
allegations of fraud or other illegality in relation to financial 
reporting; and past history of late filings. We expect the Exchange to 
carefully review each Filing Deficiency and ensure that the public 
interest is being served by continued trading. As noted above, the 
importance of timely and complete Commission filings to ensure that 
investors and the marketplace have accurate and up-to-date information 
about publicly traded companies is of extreme importance for confidence 
in our public markets.\30\
---------------------------------------------------------------------------

    \30\ As noted above, the Exchange strongly encourages companies 
to provide ongoing disclosure on the status of the Delinquent Report 
and any Subsequent Reports to the market through press releases, and 
would also take the frequency and detail of such information into 
account in determining whether an Additional Cure Period is 
appropriate. The Commission believes such disclosures are very 
important to the marketplace during the delinquency period.
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\31\ that the proposed rule change (SR-NYSE-2014-65) be, and it 
hereby is, approved.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(2).


[[Page 12238]]


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-05191 Filed 3-5-15; 8:45 am]
 BILLING CODE 8011-01-P
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