As previously reported, NYSE and Nasdaq filed proposed listing standards with the Securities and Exchange Commission (“SEC”) earlier this year to implement the SEC’s rule requiring most publicly traded companies to adopt a clawback policy to recover incentive-based compensation from current or former executive officers in connection with certain accounting restatements.
The SEC has approved the proposed listing standards of the NYSE and Nasdaq. This approval provides clarification on the effective date of the new listing standards. Both the NYSE and Nasdaq standards will be effective as of October 2, 2023. Listed companies must adopt compliant clawback policies on or before December 1, 2023. These policies will apply to incentive compensation received by covered executives on or after October 2, 2023.
The SEC’s final approval gives companies a few more months to prepare and adopt a clawback policy. As originally proposed, listed companies would have needed to adopt clawback policies by early August.