NYSE Publishes Annual Guidance Memo for NYSE-Listed Issuers

Alerts

January 29, 2020

Earlier this month, the New York Stock Exchange (NYSE) published its annual Listed Company Compliance Guidance for NYSE Issuers (guidance), which includes useful reminders of important rules and policies applicable to NYSE-listed issuers.

The first part of the guidance includes new developments from last year's annual guidance memo, including a reminder of the launch of the next phase of the NYSE's Listing Manager on April 1, 2019. The NYSE's Listing Manager is the NYSE's online portal that allows NYSE-listed issuers to, among other things, update, file, and manage listing and corporate governance documents; it is the successor to the NYSE's eGovDirect, which was decommissioned on March 29, 2019.

The second part of the guidance includes important reminders for the year ahead. As we enter the 2020 proxy season, we wanted to highlight some of the key compliance requirements and reminders in the guidance, including the following:

Record Date Notification. Subject to certain limited exceptions, an NYSE-listed issuer must notify the NYSE at least 10 calendar days prior to the record date for its annual meeting. If the record date changes, then the company must provide another advance notice of at least 10 calendar days. Notifications can be submitted electronically through the Listing Manager or emailed to proxyadmin@nyse.com.
Annual Written Affirmation. Each calendar year, NYSE-listed issuers must file an Annual Written Affirmation, among other things, affirming compliance with the NYSE's corporate governance rules. For domestic companies, this affirmation is due no later than 30 days after the company's annual shareholder's meeting or, if no annual meeting is held, 30 days after the company's annual report is filed with the Securities and Exchange Commission (SEC). This affirmation can be filed electronically through the Listing Manager.
Annual CEO Certification. In addition to the Annual Written Affirmation, domestic NYSE-listed issuers must also submit an Annual CEO Certification that confirms compliance with the NYSE's governance rules. This certification is submitted at the same time as the Annual Written Affirmation and can also be filed electronically through the Listing Manager.
Form S-8 Filings. Many companies file Registration Statements on Form S-8 to register evergreen shares under their equity incentive plans and/or employee stock purchase plans. For an NYSE-listed issuer, a supplemental listing application (SLAP) is required to be filed with the NYSE for these new shares. The SLAP must be approved before any of the new shares are actually issued. The NYSE requests at least two weeks to review and authorize SLAPs and recommends that the SLAP be submitted electronically through the Listing Manager as soon as the company's board approves the transaction. If filing a Form S-8 for any new equity plans (i.e., not evergreen shares), these same requirements would apply.
Broker Search Cards. SEC Rule 14a-13 requires broker search cards to be sent at least 20 business days prior to the record date for the annual meeting or at such later time as the rules of a national securities exchange on which the class of securities in question is listed may permit. The guidance notes that the NYSE rules do not permit a listed company to send out its broker search cards less than 20 business days prior to the record date. Accordingly, NYSE-listed issuers must send broker search cards at least 20 business days before the record date for their annual meetings. Generally, sending out broker search cards is completed by Broadridge or the transfer agent; thus, it is imperative that companies provide enough advance notice of the record date and annual meeting date to the vendors assisting them in the proxy process to meet the required deadlines.
Shareholder Approval Requirements. The guidance reminds NYSE-listed issuers that Sections 303A.08 and 312.03 of the NYSE Listed Company Manual outline the NYSE's shareholder approval requirements, including the matters on which shareholders may be required to vote. The guidance also encourages companies to consult with the NYSE prior to entering into transactions that may require shareholder approval or that may adversely affect the voting rights of existing shareholders of the listed class of common stock, and includes non-exhaustive lists of the foregoing types of transactions.
Vote Requirement. The guidance reminds NYSE-listed issuers of the voting requirements set forth in Section 312.07 of the NYSE Listed Company Manual. Where shareholder approval is a prerequisite to the listing of any additional shares or new securities of an NYSE-listed company, or where any matter requires shareholder approval, the minimum vote which will constitute shareholder approval for such purposes is defined as approval by a majority of votes cast on a proposal. NYSE-listed company bylaws should provide for this voting standard; however, this serves as a good reminder to review your bylaws and the voting standards disclosed in your proxy statement.
NYSE Timely Alert/Material News Policy. The guidance states that "Sections 201 and 202 of the Listed Company Manual require listed companies to promptly release to the public any news or information which might reasonably be expected to materially affect the market for its securities." In addition, the guidance summarizes some of the requirements, including timing and method, for communication to the NYSE of material news, in order to allow the NYSE's Market Watch team to determine, among other things, whether a temporary trading halt may be required upon the release of such information to the public. These notice requirements apply to both written and verbal releases of material news.

The foregoing summary of some of the key compliance requirements and reminders from the guidance is qualified in its entirety by the guidance and the NYSE Listed Company Manual. We urge NYSE-listed issuers to review the guidance carefully.

If you have any questions or concerns relating to the guidance, other NYSE-related compliance issues, or any related matters, please contact any member of Wilson Sonsini's public company representation practice.