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The Securities and Exchange Commission (SEC) last year amended rules under the Securities Exchange Act of 1934 to shorten the securities transaction settlement cycle for most broker-dealer securities transactions, from “T+2” to “T+1,” meaning that securities transactions will need to be settled within one business day of the transaction date (“T”), effective as of May 28, 2024. Impact on Equity Awards The new SEC-required settlement timing will directly impact equity awards that are settled through…

On September 27, 2023 and November 21, 2023, the Securities and Exchange Commission (SEC) issued additional Compliance & Disclosure Interpretations (CDIs) clarifying certain technical aspects of the pay versus performance (PVP) disclosure rules under Item 402(v) of Regulation S-K[1]. These CDIs are intended to supplement the CDIs covering PVP disclosure that were issued by the SEC on February 10, 2023.[2] By way of background, covered public companies must comply with the PVP disclosure rules beginning…

On June 9, 2023, the Securities and Exchange Commission (“SEC”) approved listing standards proposed by the NYSE and Nasdaq to implement its final Rule 10D-1 regarding recoupment of erroneously awarded compensation under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Pursuant to this approval, the effective date of the listing standards is October 2, 2023 and the deadline for U.S. listed companies to adopt a Dodd-Frank-compliant clawback policy is December 1, 2023. For…

In welcome news for U.S. listed companies, both the New York Stock Exchange (NYSE) and NASDAQ have extended the effective date of their proposed listing standards to implement the Dodd-Frank clawback requirement to October 2, 2023 (see the NYSE Amendment and Nasdaq Amendment, filed with the Securities and Exchange Commission (SEC) on June 5, 2023 and June 6, 2023, respectively). If the SEC approves the listing rules as proposed, listed companies will have until December…

On February 10, 2023, the Securities and Exchange Commission (SEC) issued Compliance & Disclosure Interpretations (CDIs) regarding the pay versus performance (PVP) disclosure rules under Item 402(v) of Regulation S-K[1]. The PVP disclosure rules apply to covered companies beginning with proxy statements or information statements filed for fiscal years ending on or after December 16, 2022 and generally require disclosure of (i) a PVP table accompanied by a narrative and/or graphical explanation of the relationship…

On December 14, 2022, the SEC adopted final rules amending Rule 10b5-1 under the Securities Exchange Act of 1934 (the “Exchange Act”), which provides an affirmative defense to insider trading for trades made under a written plan adopted when not aware of material nonpublic information (“MNPI”). The final rules add several new conditions for the availability of the affirmative defense and require new quarterly and Form 4 disclosures regarding the Rule 10b5-1 trading arrangements of…

On October 26, 2022, the SEC adopted its much-anticipated final clawback rules requiring U.S. listed issuers to: ​The rule, known as Rule 10D-1, directs national securities exchanges to establish implementing listing standards within 90 days from publication of the final rule in the Federal Register. Companies that fail to comply with the rule may be delisted. U.S. listed issuers who do not already have a clawback policy should begin preparations to design, adopt and implement…

It’s been 12 years in the making, but the SEC has finally released rules to implement the “pay versus performance” disclosure required by Section 953(a) of the Dodd-Frank Act. The new disclosure of the relationship between executive compensation “actually paid” and financial performance is required to be included in proxy statements or information statements for fiscal years ending on or after December 16, 2022 and is therefore effective for the upcoming 2023 proxy season. For a…

On Nov. 29, 2021, the staff of the U.S. Securities and Exchange Commission (SEC)’s Office of the Chief Accountant and the Division of Corporation Finance released Staff Accounting Bulletin No. 120 (SAB 120), which is effective immediately and provides guidance on how to properly recognize and disclose the compensation cost for “spring-loaded” awards made to executives of public companies subject to reporting requirements under US securities laws. SAB 120 describes spring-loaded awards as share-based compensation…

On August 26, 2020, the SEC adopted final amendments to Regulation S-K, which modernize certain disclosure requirements relating to description of business, legal proceedings and risk factors. The amendments include a new disclosure topic that will require registrants to describe their human capital resources, including any human capital measures or objectives that the registrant focuses on in managing the business, to the extent that such information is material to an understanding of the registrant’s business…