On October 26, 2022, the Securities and Exchange Commission (the “SEC”), implementing a requirement of the Dodd-Frank Act, adopted a final rule requiring the recovery of erroneously awarded incentive-based executive compensation. Rule 10D-1 of the Securities Exchange Act of 1934, as amended (“Rule 10D-1”) directs national securities exchanges and associations to establish listing standards that require a listed issuer to:
Each exchange is required to file its proposed listing standards within 90 days of the publication of Rule 10D-1 in the Federal Register, with the listing standards required to be effective no later than one year following such publication date. Issuers must adopt a Clawback Policy within 60 days after the applicable exchange’s listing standards implementing Rule 10D-1 become effective.
Overview
Five Key Components
Exclusions
Rule 10D-1 does not apply to the following types of issues:
New Disclosure Requirements
Recommended Action Steps for Issuers
There are several steps that an issuer should consider taking at this time.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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