“The disclosure of late filers has taken center stage at the exchange,” Glenn Tyranski, an New York Stock Exchange vice president in charge of compliance, told The Wall Street Journal. “While we can’t make late filers complete their financial statements any faster, we can analyze the situation and ensure that the investing public has been appropriately informed through disclosure.”
The new rule, which will become a part of the NYSE’s listing standards, was proposed in September and is expected to be formally implemented in a few months. The Journal noted, however, that it stops short of levying big penalties or imposing additional delistings.
Under the proposed rules, companies that don’t file audited results within 12 months of their due date would be delisted, according to the report. In the intervening time the exchange would “encourage” the companies to regularly provide updates on the status of their filings through press releases and partial results, and it would require company officials to be in regular contact with the exchange.
Until now, companies have been required only to inform the exchange and their shareholders that they will be late, and why, and then indicate when they do plan to file. According to the Journal, there is little written down about the consequences for a company misses a deadline.
The newspaper pointed out that of the dozen or so companies that failed to file annual reports on time in the past two years, only Interpool Inc. and Footstar Inc. were delisted.
At least 61 companies with a market capitalization exceeding $100 million sought more time to file their September quarterly results, according to proxy research firm Glass Lewis, compared with 30 in the second quarter and 36 in the first quarter. As for 2003 annual reports, 59 such companies filed for extensions, but the research firm noted that year-end delays are generally more common.
In November, the Securities and Exchange Commission postponed by one year what would have been a new, earlier deadline for most companies to file their annual and quarterly reports. For an additional year the deadline for accelerated filers will remain at 75 days after year-end for annual reports and at 40 days after quarter-end for quarterly reports.
Beginning with fiscal years ending on or after December 15, 2005 — which will mark the final phase of regulations designed to speed up filings — those deadlines will be trimmed to 60 days and 35 days respectively.