SEC reopens comment period on listing standards for recovery of erroneously awarded compensation
On October 14, the SEC reopened the comment period on proposed rules for listing standards for the recovery of erroneously awarded compensation. According to the notice, the reopened comment period allows for the submission of comments and data on rule amendments first proposed in 2015, and requests comments in response to questions being raised by the SEC now in its reopening release. Among other things, the proposed rules would prohibit national security exchanges and national securities associations to list any issuer of any security unless the issuer adopts a compensation recovery policy that meets certain standards applicable to recovering incentive-based compensation awards based on erroneously reported financial results that are later restated to correct material errors to previously issued financial statements. According to a statement in support of the re-opened comment period on the Dodd-Frank Act rule regarding clawbacks of erroneously awarded incentive-based compensation, SEC Chair Gary Gensler stated that this is “an opportunity to strengthen the transparency and quality of corporate financial statements as well as the accountability of corporate executives to their investors.” Comments are due 30 days after publication in the Federal Register.