Last week, the New York Stock Exchange’s regulation group sent its traditional annual letter to foreign private issuers (FPIs) that are listed on the Big Board. The letter reminds FPIs of the corporate governance and notification and filing obligations that the NYSE imposes on its listed companies. These requirements are separate from, and in some cases incremental to, the requirements imposed by the SEC or a listed company’s home country regulator. The letter focused on the following NYSE requirements:
- Exchange notification of material events, including dividend record dates, shareholders meeting and other corporate action events;
- Annual financial statement publication;
- Corporate governance requirements on board and audit committee membership;
- Transactions that require supplemental listing applications;
- Transactions requiring shareholder approval and the voting rights rule;
- The NYSE’s “timely alert policy” requiring companies to publicly release any news or information which might reasonably be expected to materially affect the market for its securities.
In some cases, the NYSE has discretion to waive certain requirements, and in other cases it does not. For example, the exchange cannot waive or shorten the notification requirements for record dates. On the other hand, the exchange has the ability to waive, in some cases, the shareholder approval requirements for certain securities issuances. When planning corporate action events, it is important not to overlook the exchange rule overlay to the securities laws, and for a listed company to consult with counsel who is knowledgeable in this area.
The NYSE staff is generally willing to provide confidential letter rulings on questions or doubts that can arise regarding the interpretation of its listing standards. For example, if asked, the exchange will tell a listed company in advance whether it will permit brokers to vote uninstructed customer shares with respect to a particular proposal. For this reason, in cases of extraordinary transactions or proposals, it is sometimes advisable to confidentially send preliminary proxy statements to the exchange staff for review even prior to filing the material with the SEC.