NYSE Rule on Reporting by Foreign Private Issuers

Stuart H. Gelfond is a partner in the Corporate Department at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank publication authored by Mr. Gelfond and Hayley S. Cohen.

Effective February 19, 2016, the New York Stock Exchange LLC (“NYSE”) adopted a new rule to the NYSE Listed Company Manual (the “Manual”). [1] The new rule requires that foreign private issuers (“FPIs”) submit a Form 6-K to the Securities and Exchange Commission (“SEC”) that, at a minimum, includes (i) an interim balance sheet as of the end of its second fiscal quarter and (ii) a semi-annual income statement that covers its first two fiscal quarters. This Form 6-K will be required to be submitted no later than six months following the end of the company’s second fiscal quarter. The financial information must be presented in English, but will not be required to be reconciled to U.S. generally accepted accounting practices. The new rule will be effective beginning with any fiscal year beginning on or after July 1, 2015. Therefore, the earliest semi-annual period with respect to which a company would be required to furnish a Form 6-K under the rule would be for the six months ended December 31, 2015. [2] This means that any listed company would have at least until June 30, 2016 to file the Form 6-K, with the required semi-annual data, under the new rule.

This new rule is a significant change in policy as the NYSE has not previously required FPIs to furnish such information to the SEC on a regular basis. The NYSE believes that this new practice is essential for the protection of investors because annual financial disclosure is too infrequent to enable investors to make informed investment decisions, especially as that information ages in the latter part of the disclosure cycle. Further, the NYSE’s experience indicates that almost all listed FPIs prepare and issue interim financial information required by the new rule on at least a semi-annual basis. The new rule will ensure that the issuance of such financial information is a uniform practice among all listed FPIs. The NYSE stated that it does not wish to discourage companies from providing more expansive or more frequent interim financial information and, as a result, FPIs may continue to furnish interim financial information that is more expansive or provide such information more frequently than required by the new rule. In addition, the NYSE does not intend the new rule to relieve companies of the obligation to comply with any reporting obligations they may have under the requirements of Form 6-K or home country law or regulation.

The new rule will subject FPIs failing to furnish the required Form 6-K to the same compliance procedures applied to listed companies that are late in filing their annual report or Form 10-Q. A failure to file the required Form 6-K within the period specified by the new rule will constitute a Late Filing Delinquency. As with any other Late Filing Delinquency, a company that was delayed in filing its Form 6-K will have an initial six months compliance period within which to file the Form 6-K and any subsequently due Form 20-F or Form 6-K. If the company does not file all the required filings during that initial six month period, the NYSE staff has the discretion to provide an additional compliance period of up to six months. Any company that fails to become timely with its filing obligations within the provided compliance periods will be subject to delisting.

In addition to adopting the new rule, the NYSE has amended other sections of the Manual to clarify that, notwithstanding the provision in the Manual that allows listed FPIs to follow home country practice in lieu of complying with the NYSE’s interim reporting requirements applicable to domestic companies, all FPIs will be required to disclose interim financial information pursuant to the new rule.


[1] The SEC release announcing the proposed amendments is available in its entirety here.
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[2] This would be for companies with a fiscal year ending June 30.
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