Proposed Rule2022-12792
Reopening of Comment Period for Listing Standards for Recovery of Erroneously Awarded Compensation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 14, 2022
Effective
July 14, 2015
Issuing agencies
Securities and Exchange Commission
Abstract
The Securities and Exchange Commission ("Commission") is reopening the comment period for its proposal for Listing Standards for Recovery of Erroneously Awarded Compensation, Exchange Act Release No. 34-75342 (July 1, 2015) (the "Proposing Release"). The proposed rules would direct the national securities exchanges and national securities associations to establish listing standards that would require each issuer to develop and implement a policy providing for the recovery, under certain circumstances, of incentive-based compensation based on financial information required to be reported under the securities laws that is received by current or former executive officers, and require disclosure of the policy. The Commission reopened the comment period for Proposing Release in the Reopening of Comment Period for Listing Standards for Recovery of Erroneously Awarded Compensation Release, Exchange Act Release No. Release No. 34-93311 (Oct. 14, 2021) (the "Reopening Release"). The Commission is re-opening the comment period to allow interested persons to analyze and comment on the additional analysis and data on compensation recovery policies and accounting restatements contained in a staff memorandum that was added to the public comment file on June 8, 2022.
Full Text
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<title>Federal Register, Volume 87 Issue 114 (Tuesday, June 14, 2022)</title>
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[Federal Register Volume 87, Number 114 (Tuesday, June 14, 2022)]
[Proposed Rules]
[Pages 35938-35939]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-12792]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 229, 240, 249, and 274
[Release No. 33-11071; 34-95057; IC-34610; File No. S7-12-15]
RIN 3235-AK99
Reopening of Comment Period for Listing Standards for Recovery of
Erroneously Awarded Compensation
AGENCY: Securities and Exchange Commission.
ACTION: Proposed rule; reopening of comment period.
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SUMMARY: The Securities and Exchange Commission (``Commission'') is
reopening the comment period for its proposal for Listing Standards for
Recovery of Erroneously Awarded Compensation, Exchange Act Release No.
34-75342 (July 1, 2015) (the ``Proposing Release''). The proposed rules
would direct the national securities exchanges and national securities
associations to establish listing standards that would require each
issuer to develop and implement a policy providing for the recovery,
under certain circumstances, of incentive-based compensation based on
financial information required to be reported under the securities laws
that is received by current or former executive officers, and require
disclosure of the policy. The Commission reopened the comment period
for Proposing Release in the Reopening of Comment Period for Listing
Standards for Recovery of Erroneously Awarded Compensation Release,
Exchange Act Release No. Release No. 34-93311 (Oct. 14, 2021) (the
``Reopening Release''). The Commission is re-opening the comment period
to allow interested persons to analyze and comment on the additional
analysis and data on compensation recovery policies and accounting
restatements contained in a staff memorandum that was added to the
public comment file on June 8, 2022.
DATES: The comment period for the proposed rule published July 14,
2015, at 80 FR 41144, which was initially reopened on October 21, 2021,
at 86 FR 58232, is again reopened. Comments should be received on or
before July 14, 2022.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/submitcomments.htm">https://www.sec.gov/rules/submitcomments.htm</a>).
Paper Comments
<bullet> Send paper comments to Vanessa A. Countryman, Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number S7-12-15. This file number
should be included on the subject line if email is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
website (<a href="https://www.sec.gov/rules/proposed.shtml">https://www.sec.gov/rules/proposed.shtml</a>). Comments also are
available for website viewing and printing in the Commission's Public
Reference Room, 100 F Street NE, Washington, DC 20549-1090 on official
business days between the hours of 10 a.m. and 3 p.m. Operating
conditions may limit access to the Commission's public reference room.
All comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly.
Studies, memoranda, or other substantive items may be added by the
Commission or staff to the comment file during this rulemaking. A
notification of the inclusion in the comment file of any such materials
will be made available on our website. To ensure direct electronic
receipt of such notifications, sign up through the ``Stay Connected''
option at <a href="http://www.sec.gov">www.sec.gov</a> to receive notifications by email.
FOR FURTHER INFORMATION CONTACT: Steven G. Hearne, Senior Special
Counsel, in the Office of Rulemaking, at (202) 551-3430, Division of
Corporation Finance, Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549.
SUPPLEMENTARY INFORMATION: Section 954 of the Dodd-Frank Act added
Section 10D to the Securities Exchange Act of 1934 \1\ (``Exchange
Act''), which provides that the Commission require national securities
exchanges and national securities associations to prohibit the listing
of any security of an issuer that does not develop and implement a
policy providing for the recovery of erroneously awarded compensation
and for disclosure of that policy. As described more fully in the
Proposing Release,\2\ under the proposed rules, an issuer would be
subject to delisting if it does not adopt a compensation recovery
policy that complies with the applicable listing standard, disclose the
policy in accordance with Commission rules, and comply with the
policy's recovery provisions. The Commission previously reopened the
comment period for the Proposing Release to allow interested persons
further opportunity to analyze and comment upon the proposed rules in
light of developments since the publication of the Proposing Release
and our further consideration of the Section 954 mandate.\3\ The
Reopening Release put forth additional requests for comment on
potential revisions to the proposal and sought additional comment on
the proposal. The Reopening Release was published for comment in the
Federal Register on October 21, 2021, and the comment period closed on
November 22, 2021.
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\1\ 15 U.S.C. 78a et seq.
\2\ See Listing Standards for Recovery of Erroneously Awarded
Compensation, Release No. 34-75342 (Jul. 1, 2015) [80 FR 41144 (Jul.
14, 2015)].
\3\ See Reopening of Comment Period for Listing Standards for
Recovery of Erroneously Awarded Compensation, Release No. 34-93311
(Oct. 14, 2021) [86 FR 58232 (Oct. 21, 2021] (``Re-opening
Release'').
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The staff of the Division of Economic and Risk Analysis has
prepared a memorandum that provides additional analysis and data on
compensation recovery policies and accounting restatements.
Specifically, the staff memorandum (i) discusses the increase in
voluntary adoption of compensation recovery policies by issuers; (ii)
provides estimates of the number of additional restatements that would
trigger a compensation recovery analysis if, as the Commission
described in the Reopening Release, the rules were
[[Page 35939]]
extended to include all required restatements made to correct an error
in previously issued financial statements; and (iii) briefly discusses
some potential implications for the costs and benefits of the proposed
rules.
We believe that the information presented in the memorandum has the
potential to be informative for evaluating the proposed rules. We are,
therefore, reopening the comment period for an additional 30 days to
permit interested parties to comment on the staff memorandum, which has
been included in the comment file.
By the Commission.
Dated: June 8, 2022.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2022-12792 Filed 6-13-22; 8:45 am]
BILLING CODE 8011-01-P
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