SEC Finalizes NYSE and NASDAQ Rules Regarding Compensation Committee and Compensation Adviser Requirements

Earlier this month, the Securities and Exchange Commission (the “SEC”) finalized rules approving the New York Stock Exchange LLC (“NYSE”) and The NASDAQ Stock Market LLC (“NASDAQ”) proposals regarding compensation committee independence and compensation adviser requirements. As discussed below, listed companies must comply with certain provisions of the new rules by July 1, 2013, so companies that have not already done so should promptly assess actions that must be taken in order to timely comply with the new rules. The remainder of this alert summarizes the key provisions of the new rules.

Background

As mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), in June 2012, the SEC adopted Rule 10C-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Rule 10C-1 requires national securities exchanges to adopt listing rules consistent with the compensation committee and compensation adviser requirements imposed under the Dodd-Frank Act. In response, the NYSE and the NASDAQ proposed amendments to their listing standards, which were approved by the SEC earlier this month.

Please see full alert below for more information.

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