SEC Adopts Final Rule Requiring Listing Standards for Compensation Committees
On June 20, 2012, the Securities and Exchange Commission adopted Rule 10C-1 under the Securities Exchange Act of 1934, as amended, in compliance with Section 10C thereof, which section had been added to the Exchange Act pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Rule 10C-1 closely follows Section 10C and directs national securities exchanges (“exchanges”) to prohibit the listing of any equity security of an issuer that does not comply with the rules to be promulgated by the exchanges regarding, among other matters, the independence of compensation committees, the authority to retain compensation consultants and the consideration of compensation adviser independence. The SEC also amended Item 407(e)(3) of Regulation S-K to require the disclosure by listed issuers of any conflicts of interest of their compensation consultants.