The Securities and Exchange Commission has announced that is reopening the public comment period for its proposed rules involving listing standards for the recovery of erroneously awarded compensation.
The rules were proposed to implement Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Under the proposal, national securities exchanges would have to establish listing standards requiring listed companies to adopt and comply with a compensation recovery policy, often called a clawback policy.
The SEC said it received numerous letters of comment on its initial 2015 proposal. Given regulatory and market developments since then, the SEC decided to provide another opportunity for the public to submit their comments.
Commission staff members have also provided a memo with additional data for evaluating the proposed rules. The memo discusses potential implications for the costs and benefits of the rules, as well as the increase in voluntary adoption of compensation recovery policies by issuers.
In addition, the SEC said the staff memo “provides estimates of the number of additional restatements that would trigger a compensation recovery analysis if, as the Commission described in the October 2021 reopening release, the rules were extended to include all required restatements made to correct an error in previously issued financial statements.”
The SEC said the staff memo is included in the public comment file for view. The public comment period will remain open for 30 days after the proposals are published in the Federal Register.
Financial professionals who work for broker-dealers, RIAs or other financial services companies operate in a highly regulated industry that is overseen by the SEC, state regulators and other self-regulatory organizations. The attorneys at Lewitas and Hyman understand this because we were formally senior attorneys in the SEC’s Division of Enforcement. If you are the subject of a regulatory proceeding, contact us at (312) 291-4600 or through our online contact form for a free consultation.