Corporations often release market-moving news after the 4 p.m. close in New York. But under a proposal from NYSE, its listed companies would be barred from doing so until their closing stock price is released or until 4:05 p.m. — whatever’s earlier.
When companies release news before that calculation is complete, traders can pounce on the information and sway the closing price. But that’s not what publicly traded corporations intend; they’re aiming for any reaction to be recorded a day later.
“This prohibition would mitigate the risk of market disruption and investor confusion associated with the occurrence of significant news-related price volatility on other markets during the brief period between the NYSE’s official closing time and the completion of the closing auction,” the exchange said in its filing Tuesday.