WHAT IS Material News
Material news is news a company releases that might affect the value of its securities or influence investors' decisions. Also known as material information.
BREAKING DOWN Material News
Material news includes information such as unusual corporate events, unexpected earnings results, stock splits and all other price-sensitive developments in a company, including proposed acquisitions, mergers, profit warnings and the resignation of directors. The New York Stock Exchange (NYSE) Listed Company Manual requires listed companies notify the NYSE at least 10 minutes in advance of any announcement of material news during trading hours so that NYSE can choose to temporarily halt trading in the company’s securities.
On December 4, 2017, the NYSE changed its rules to prohibit listed companies from issuing material news after the close of trading, generally 4:00 p.m. Eastern Time, until the earlier of the following scenarios: publication of the company’s official NYSE closing price or five minutes after the close of trading. This 2017 change amended the earlier 2015 amendment of Section 202.06 of the NYSE Listed Company Manual, which merely requested or advised listed companies that wanted to release material news after the close of trading wait 15 minutes, or publication of the company’s official closing price, if posted earlier. This delay is meant to avoid investor confusion in cases where trading on other markets continued after the close of trading on the NYSE, and information released by a company after the close of trading on the NYSE caused differences between the NYSE closing price and trading prices on other markets.
Despite the 2015 addition of advisory text in Section 202.06, the NYSE continued to experience situations where material news released shortly after the close of trading resulted in investor confusion. To avoid pricing disruptions when the NYSE closing auction is delayed more than five minutes, Section 202.06 as amended will continue to include advisory text requesting that companies avoid issuing material news until 15 minutes after the NYSE’s official closing time, or earlier publication of the company's official closing price.
Material News vs. Material Insider Information
Material news is that company's price-sensitive information announced publicly to shareholders, while material insider information is material information about certain aspects of a company that has not yet been made public, but that will have an impact on the company's share price once released. It is illegal for holders of material insider information to use the information to their advantage in trading stock or to provide the information to family members or friends so they can use it to make trades.