February 26, 2007

Confusion Reigns: Do NYSE Companies Need Press Releases Announcing Their 10-Ks?

Recently, a number of members have asked about NYSE Rule 203.01, as they wonder why companies listed on the New York Stock Exchange haven’t been issuing press releases when they’ve filed their Form 10-K with the SEC (indicating that the 10-K is available from their website, etc).

As you might recall, last August, the NYSE amended its rules – to facilitate the SEC’s e-proxy initiative – that repealed the requirement that listed companies distribute a copy of the annual report containing financial statements to shareholders. As part of the rule changes, the NYSE amended Rule 203.01 to provide that listed companies must (1) post its Form 10-K on or through the company’s website, (2) state on its website that paper copies of the audited financial statements are available upon request and free of charge, and (3) simultaneously issue a press release announcing the filing with the SEC of the Form 10-K and stating that the Form 10-K is available on the company’s website.

However, the NYSE recently stated in its annual corporate governance letter to listed companies that a listed company will be deemed to satisfy Rule 203.01 if it distributes its audited financial statements in compliance with the SEC’s proxy rules (ie. “The Exchange will deem a domestic company that distributes its audited financial statements to shareholders in compliance with SEC proxy rules to be in compliance with the requirements of Section 203.01”). In other words, the NYSE clarified that a press release is not necessary if the company delivers a glossy annual report with financials to shareholders.

So most listed companies will not have to issue press releases when they file their Form 10-Ks. By the way, several companies have issued such a press release: Ryder Systems, Quicksilver, Krispy Kreme Doughnuts; Aspen Insurance Holdings Limited; Deere & Company; Building Materials Holding Corporation; and Pioneer Natural Resources Company. Thanks to Beth Ising of Gibson Dunn for helping to sort this quagmire out…

Last Minute Planning for the Proxy Season

We have posted the transcript for our webcast: “Last Minute Planning for the Proxy Season.”

The Promise of Transparency — Corp Fin in 2007

On Friday, Corp Fin Director John White delivered this speech entitled “The Promise of Transparency — Corporation Finance in 2007,” which covers a bunch of rulemakings, etc. that are in the Division’s “kitty” for the year.