SEC's Proposed New Reporting Rules for Institutional Investment Managers


On October 18, 2010, the Securities and Exchange Commission (“SEC”) released proposed rules that would implement additional disclosure requirements for certain institutional investment managers to report, at least annually, how they voted on the following executive compensation matters: (i) say-on-executive-pay, (ii) frequency of say-on-executive-pay, and (iii) say on golden parachute arrangements. The proposed rules are required by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). This blogpost sets forth the background of the proposed new rules, the investment managers that would be subject to the new rules, how the proposed disclosure obligations expand existing disclosure obligations, whether confidential treatment can be obtained, when the changes will become effective and next steps.


The SEC released these proposed rules in conjunction with the Dodd-Frank Act’s so-called “Say-on-Pay” provisions, which would require issuers to provide for separate non-binding shareholder advisory votes in proxy statements to approve the compensation of named executive officers and to determine the frequency with which shareholders will need to approve executive compensation (every year, every other year, or every three years). While the say-on-executive-pay and frequency of say-on-executive-pay votes must be included in any proxy statement for an annual meeting taking place on or after January 21, 2011 (regardless of when the SEC’s final rules become effective), the say on golden parachute arrangements requirement is not triggered until the SEC’s final rules become effective. (For further information regarding the “Say-on-Pay” provisions, see our blog postings from October 21, 2010 “Time to Get Ready for Say-on-Pay as SEC Releases Proposed Rules” and July 26, 2010 “The Regulatory March to Reform Executive Compensation Practices Takes Another Step Forward”.)

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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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