United States:
NYSE 2024 Listed Company Compliance Guidance Memo: New Rules And Important Reminders
24 February 2024
Winston & Strawn LLP
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On January 31, 2024, the New York Stock Exchange (the NYSE or
the Exchange) issued its annual Listed Company Compliance Guidance Memo for
2024 (the Memo). The Memo describes new rules and important
reminders for all NYSE-listed companies, with any rule or policy
distinctions for domestic versus foreign private issuers (FPIs)
identified within.
To access a complete text of the Exchange rules, please see the
NYSE Listed Company Manual (LCM).
What's New
|
Recovery of Erroneously Awarded
Compensation
|
- Required to have in place policies and procedures for recovery
of erroneously awarded compensation, subject to limited
exceptions.
|
Sales of Securities to Passive Shareholders
|
- LCM Section 312.03(b)(i) is limited in application to sales to
a director, officer, controlling shareholder or member of a control
group, or any other substantial security holder of the company that
has an affiliated person who is an officer or director of the
company (each, an Active Related Party) and is no longer applicable
to passive shareholders that do not meet the definition of an
Active Related Party.
|
Shortened Settlement Cycle (T+1)
|
- Settlement cycle shortened from two business days after the
trade date (T+2) to one business day after the trade date (T+1),
which will go into effect on May 28, 2024. Please see here for a more detailed discussion in an
earlier blog post.
- No securities will become ex-dividend on May 28, 2024.
Ex-dividend trading dates during the transition period are set as
follows: securities paying a dividend with a record date of May 28
will be traded ex-dividend on May 24 and securities paying a
dividend with a record date of May 29 will be traded ex-dividend on
May 29.
|
Important Reminders: All Issuers
|
NYSE Timely Alert/Material News Policy
|
- Required to promptly release to the public any news that might
reasonably be expected to materially affect the market for their
securities. Comply by disseminating news via a press release or any
other Regulation FD-compliant method.
- Contact the Exchange's Market Watch Group 10 minutes before
dissemination of material news when planning to disseminate between
7:00 a.m. ET and 4:00 p.m. ET or promptly upon becoming aware of a
material event having occurred. Provide a copy of the material
announcement and information about its dissemination.
- Not required to call the Exchange outside the hours of 7:00
a.m. ET and 4:00 p.m. ET but should provide a copy of the news once
it is disclosed.
|
Publishing Material News After the Close
|
- Prohibited from publishing material news after the official
closing time for the Exchange's trading session until the
earlier of 4:05 p.m. ET or the publication of the official closing
price.
|
Changes to the Date of a Listed Company's Earnings
Release
|
- Promptly and broadly disseminate any date change to the market
non-selectively.
|
Annual Meeting Requirement
|
- Required to have an annual shareholders' meeting during
each fiscal year. This applies to all issuers with voting stock, as
well as those with non-voting stock if required under their
governing documents. If a meeting is postponed or adjourned, the
company has not complied.
- FPIs can follow their home-country practice in lieu of
complying with the foregoing requirement if their home
countries' laws differ.
|
Record Date Notification
|
- Required to notify the Exchange at least 10 calendar days in
advance of all record dates. Provide another advance notice of at
least 10 calendar days if record date changes. Publication by press
release or SEC filing does not constitute notice.
|
Share Reporting
|
- Required to report shares no later than the 10th day following
the end of each calendar quarter.
|
Corporate Action Notifications
|
- Required advance notice to the Exchange and public
dissemination via a press release or another Regulation
FD-compliant method for any corporate action affecting a listed
security. Such announcement should be issued at least 10 calendar
days in advance.
- Required to provide notice of redemption or conversion of a
listed security at least 15 calendar days in advance.
|
DRS Eligibility
|
- Required that all listed securities be made eligible for a
direct registration system (DRS) operated by a securities
depository.
|
Requirements for Annual Reports
|
- If required to file with the SEC an annual report that includes
audited financial statements, then must simultaneously make such
annual report available to shareholders on or through the
company's website.
- If not required to comply with the SEC proxy rules, then must
post notice on the company's website to provide all holders the
ability to receive a copy of the complete audited financial
statements. Required to also issue a press release.
|
Annual and Interim Written Affirmations of Compliance
with Exchange Corporate Governance Requirements
|
- Required to file an Annual Written Affirmation (AWA) each
calendar year.
- For domestic companies, the AWA is due no later than 30 days
after the company's annual shareholders' meeting or, if no
annual meeting is held, 30 days after the company's annual
report is filed with the SEC. Required to also submit an Annual CEO
Certification, incorporated in the AWA.
- FPIs are required to file an AWA 30 calendar days after the
company's annual report is filed with the SEC.
- Required to file an Interim Written Affirmation (IWA) within
five business days after any triggering event. Domestic companies
are not required to submit an IWA for changes that occur within 30
days after the annual meeting if they are already included in the
AWA.
|
Change in Executive Officers
|
- Prompt notice required if change in executive officers.
|
Transactions Requiring Supplemental Listing
Applications
|
- Required to file a Supplemental Listing Application to seek
authorization for a variety of corporate events.
|
Related-Party Transactions
|
- A company's audit committee, or another independent body of
the board of directors, must conduct a reasonable prior review and
oversight of all related-party transactions for potential conflicts
of interest and prohibit such a transaction if it determines it to
be inconsistent with the interests of the company and its
shareholders.
|
Important Reminders: Domestic Issuers
|
Broker Search Cards
|
- Required to send a search card to any entity that the company
knows is holding shares for beneficial owners when soliciting
proxies in connection with a shareholder meeting. Required that the
search card be sent at least 20 business days before the record
date for the annual meeting.
|
NYSE Rule 452, Voting by Member
Organization
|
- Recommended to submit preliminary proxy materials for review
because the Exchange is then able to assess the permissibility of
broker voting.
|
Shareholder Approval and Voting Rights
Requirements
|
- Recommended to consult the Exchange prior to entering into a
transaction that may require shareholder approval and/or adversely
affect the voting rights of existing shareholders.
|
Voting Requirements for Proposals at Shareholder
Meetings
|
- Where shareholder approval is required, the minimum vote that
constitutes approval for such purposes is approval by a majority of
votes cast.
|
Important Reminders: FPIs
|
FPI Semi-Annual Reporting
|
- Required to submit a Form 6-K containing semi-annual unaudited
financial information no later than six months following the end of
the company's second fiscal quarter.
|
Winston's Capital Markets and Securities Law Watch will
continue to provide updates on new rulemaking and post additional
updates as they become available.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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