Originally proposed July 2015, the new rules and rule amendments would: 1) require each listed company to provide disclosure about its recovery of excess incentive-based compensation and file its compensation recovery policy, and 2) delineate the incentive-based compensation that is subject to recovery.

The SEC has reopened the comment period for the proposed rules to enforce Section 954 of the Dodd-Frank Act regarding listing standards for the recovery of money erroneously disbursed for incentive-based executive compensation. The proposal would require national securities exchanges to establish listing standards that would mandate that listed companies adopt and comply with a compensation recovery policy, satisfying the requirements of Section 10D of the Exchange Act. This is commonly referred to as a clawback policy.

The SEC received many comments regarding the 2015 proposal, and considering the regulatory and market changes since 2015, the agency is providing an opportunity for the public to review and submit additional comments. Interested parties are invited to comment on all aspects of the original proposal and developments since its initial release, including:

• the SEC’s further consideration of the Section 954 mandate and trends in accounting practices
• potential economic and other effects of the proposal
• questions that the reopening release issue may have raised

Reopening the comment period is intended to strengthen the accountability of corporate executives to their investors and enhance the transparency and quality of corporate financial statements. The July 2015 proposed rule announcement and the reopening release issue are available on sec.gov.

The public comment period will remain open for 30 days following publication of the release in the Federal Register. Comments may be submitted electronically via the SEC’s internet submission form or emailed to rule-comments@sec.gov. Paper submissions may be mailed to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090. Submissions should refer to File Number S7-12-15, and if email is used, the file number should appear on the subject line. Information that is submitted will become part of the meeting’s public record and posted on sec.gov.

Source:

SEC Reopens Comment Period for Listing Standards for Recovery of Erroneously Awarded Compensation (sec.gov)

Commission Notice Reopening Comment Period (sec.gov)

Fact Sheet (sec.gov)