On March 30, 2011, the Securities and Exchange Commission (SEC) unanimously voted to propose rules that would, among other things, direct the national securities exchanges to adopt listing standards relating to the independence of a listed company’s compensation committee of the board of directors and the authority of the committee to hire compensation consultants and other advisers. The proposed rules also would require enhanced and additional disclosures from companies regarding the use of compensation consultants and other advisers and conflicts of interests. The proposed rules implement the provisions of Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), which adds Section 10C to the Securities Exchange Act of 1934 (the Exchange Act).

Once an exchange’s new listing standards are in effect, a listed company must meet these standards in order for its shares to continue trading on that exchange.

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