Listing Standards for Compensation Committees and Disclosure Regarding Compensation Consultant Conflicts of Interest (SEC Final Rules and Amendments)

On June 20, 2012, the SEC adopted a new rule and amendments to its proxy disclosure rules to implement Section 952 of the Dodd-Frank Act, which added Section 10C to the Exchange Act. Section 10C requires the SEC to adopt new disclosure rules concerning compensation consultant conflicts of interest.

Section 10C also requires the SEC to adopt rules directing the national securities exchanges-such as NYSE and NASDAQ-and national securities associations (collectively, the "exchanges") to adopt listing standards with respect to compensation committees and compensation advisers. Under the new rule, the exchanges will be directed to prohibit the listing of an equity security of certain issuers that are not in compliance with Section 10C's compensation committee and compensation adviser requirements. Smaller reporting companies are exempted from these requirements.

The new rule and amendments will take effect on July 28, 2012. No later than September 25, 2012, each exchange that lists equity securities must propose listing standards that comply with the rule. The exchanges must have any new listing standards approved by the SEC no later than June 27, 2013.

View press release in full here (links externally to SEC website).