New NYSE FAQs
By: Cydney Posner
The NYSE has recently posted some new FAQs about 2005 disclosure obligations for listed companies under section 303A. Below are the NYSE's responses:
- All disclosures required by Section 303A and/or Rule 10A-3 must be included in any specified document distributed in 2005.
- Incorporation by reference of any required disclosure is not permitted.
- Failure to include any Section 303A required disclosure in the specified document or inappropriately incorporating a disclosure by reference is considered material non-compliance and as such is a Section 303A.12(b) reportable event of non-compliance. Companies that have inadvertently failed to make the required Section 303A.12(a) disclosure in this year’s annual report should consult their Exchange Corporate Governance specialist regarding necessary action.
- Independence Disclosure in the annual proxy statement
- Companies must identify which directors are deemed independent and disclose the basis for that determination.
- Categorical standards of independence, if adopted, must be disclosed, not incorporated by reference.
- The proxy must also include a discussion of any relationships considered by the board in determining a director’s independence, unless the company had adopted categorical standards, in which case, the relationship need only be disclosed if it falls outside of the categorical standards.
- Section 303A.12(a) CEO Certification -
- This year’s annual report to shareholders must disclose that the company submitted a Section 12(a) CEO Certification to the NYSE last year.
- Companies need only reference that the previous year’s CEO Certification was submitted to the NYSE. The text of the certification need not be included in the annual report.
- If the previous year’s CEO Certification was qualified in any way, the company must disclose that qualification.
- Section 303A.12(a) SEC CEO/CFO Certification-
- Section 303A.12(a) also requires that companies disclose in this year’s annual report whether or not they filed with the SEC the CEO/CFO certification required under Section 302 of the Sarbanes-Oxley Act as an exhibit to their most recently filed Form 10-K.
- The text of the certification need not be included in the annual report.