NYSE Clarifies Advance Inquiry Rule; NYSE MKT Requires CEO Certification

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Feb. 18 — The New York Stock Exchange has amended its Listed Company Manual to clarify that issuers soliciting proxy materials through brokers or others must make certain inquiries 20 days before the record date for shareholder meetings.

The amendment, now effective, clarifies that listed companies must comply with 1934 Securities Exchange Act Rule 14a-13.

Rule 14a-13 provides that where shares are held by a record holder, the company must ask the record holder whether other people are beneficial owners of the shares and, if so, how many copies of the proxy materials must be provided to those owners.

The rule also provides that the inquiries must be made at least 20 business days before the record date for the shareholder meeting. Where the 20-day deadline is impracticable, the rule provides for other timelines.

The exchange said the amendment is necessary to address possible issuer “confusion” over an NYSE provision that may be read as allowing only a 10-day advance inquiry.

The Securities and Exchange Commission is soliciting comments on the rulemaking.

Although the amendment now is effective, the SEC may—within 60 days of the filing of the NYSE proposal—temporarily suspend the rule change if it appears necessary in the public interest.

The comments should refer to File No. SR-NYSE-2015-07 and be submitted within 21 days of the publication of the amendment in the Federal Register.

CEO Certifications 

In other developments, NYSE MKT—an equities exchange for small-cap companies—has amended its Company Guide to require chief executive officers of listed companies to annually certify that they are not aware of any violations by their companies of NYSE MKT corporate governance listing standards.

The rule amendments—published in the Federal Register Feb. 11 (80 FR 7659)—are immediately effective.

NYSE MKT said the new provisions will “focus” CEOs and senior management on compliance with its corporate governance requirements. The changes also will harmonize NYSE MKT's requirements more closely with that of the NYSE.

The two exchanges are owned and operated by Intercontinental Exchange Inc. and regulated by NYSE Regulation Inc.

The SEC request for comments is available at http://www.sec.gov/rules/sro/nyse/2015/34-74287.pdf.

The NYSE MKT Federal Register entry is available at http://tinyurl.com/ke98bxo.


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