[Federal Register Volume 61, Number 143 (Wednesday, July 24, 1996)]
[Notices]
[Pages 38497-38498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18718]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37450; File No. SR-NYSE-96-11]
Self-Regulatory Organizations; the New York Stock Exchange, Inc.;
Order Granting Approval To Proposed Rule Change Relating to Procedures
for Public Release of Information by Its Listed Companies
July 17, 1996.
I. Introduction
On May 7, 1996, the New York Stock Exchange, Inc. (``NYSE'' or
``Exchange'') submitted to the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend its rules governing the
procedures followed by its listed companies for disseminating material
news or information to the public.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
The proposed rule change was published for comment in Securities
Exchange Act Release No. 37237 (May 22, 1996), 61 FR 26943 (May 29,
1996). No comments were received on the proposal.
II. Description of the Proposal
The Exchange's timely disclosure procedures require listed
companies to release to the public any news or information which might
reasonably be expected to materially affect the market for their
securities. Section 202.06(B) and Section 202.06(C) of the Exchange's
Listed Company Manual currently requires listed companies to
disseminate material news to Dow Jones & Company, Inc. (``Dow Jones'')
and
[[Page 38498]]
Reuters Economic Services (``Reuters''). Listed companies are
encouraged, though not required, to promptly distribute news releases
to Bloomberg Business News (``Bloomberg''). It is common practice today
among many listed companies to disseminate material news to Dow Jones,
Reuters and Bloomberg.
The Exchange proposes to amend this rule to require listed
companies to disseminate news or information which might reasonably be
expected to materially affect the market for their securities to
Bloomberg, in addition to Dow Jones and Reuters. According to the NYSE,
Bloomberg's news network has dramatically expanded in recent years and
reaches a broad base of equity participants and related subscribers.\3\
---------------------------------------------------------------------------
\3\ Information obtained from Bloomberg's Home Page on the
internet (www.bloomberg.com) indicates that Bloomberg, an affiliate
of Bloomberg Financial Markets, is a 24-hour, global news service
which instantaneously transmits more than 3,000 stories daily to
over 140,000 on-line customers from its 63 bureaus around the world.
It is a full-service news service available on dedicated computer
terminals. According to Bloomberg, it provides live coverage of the
world's governments, corporations, industries, and all major
financial markets. These markets include: government, corporate, and
municipal bonds; equity and preferred stocks; commodities; and
currencies. In addition, Bloomberg states its news byline regularly
appears in more than 160 flagship newspapers throughout the United
States, Europe and Asia.
---------------------------------------------------------------------------
III. Discussion
After careful consideration of the NYSE's proposal, and based on
the belief that Bloomberg is a widely used news service organization
within the investing community, the Commission finds that the NYSE's
proposal is consistent with the requirements of the Act and the rules
and regulations thereunder applicable to a national securities
exchange. In particular, the Commission believes the proposal is
consistent with Section 6(b)(5) \4\ of the Act, which requires, among
other things, that the rules of an exchange be designed to promote just
and equitable principles of trade, and to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission believes that it is reasonable for the NYSE to
require its listed companies to distribute material news releases to
Bloomberg as well as Dow Jones and Reuters as currently required. As
previously stated, Bloomberg is a 24-hour, global news service which
instantaneously transmits more than 3,000 stories daily to over 140,000
on-line customers from its 63 bureaus around the world; and, its news
byline regularly appears in more than 160 flagship newspapers
throughout the U.S., Europe and Asia.
The Commission believes that approval of the NYSE's proposal to
amend Section 202.06(B) and Section 202.06(C) of its Listed Company
Manual to mandate the dissemination of material news to Bloomberg will
provide the public with an additional source for obtaining information
about NYSE listed companies, thereby improving the public's ability to
assess the suitability of these companies for various investment
purposes. Expanding the list of required news services to include
Bloomberg will also increase the probability of the material news being
received by those it potentially may impact, and those most likely to
be in need of the information.
Moreover, the addition of Bloomberg should facilitate the
widespread dissemination of the information within the market place,
thus improving the public's ability to be quickly informed about
material changes affecting listed companies. Additionally, the
mandatory dissemination of material news to Bloomberg will not
necessarily impose any undue burden on listed companies because the
proposal is simply to codify what NYSE already has stated is a
widespread practice of many NYSE listed companies and in any case, any
additional burden is minimal. Based on the above, the Commission
believes that the proposed amendment is consistent with Section 6(b)(5)
\5\ of the Act in that it seeks to promote just and equitable
principles of trade, will serve to prevent fraudulent and manipulative
acts, and, in general, to protect investors and the public.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
IV. Conclusion
For the reasons discussed above, the Commission believes the
proposal of the NYSE to amend its rules, contained in Section 202.06(B)
and Section 202.06(C) of its Listed Company Manual, which govern the
procedures followed by its listed companies for disseminating material
news or information to the public is consistent with Section 6(b)(5) of
the Act.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\6\ that the proposed rule change (SR-NYSE-96-11) is approved.
\6\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\7\
---------------------------------------------------------------------------
\7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-18718 Filed 7-23-96; 8:45 am]
BILLING CODE 8010-01-M
