SEC Approves NYSE and Nasdaq Amended Proposed Clawback Listing Standards, Extending the Compliance Deadline to December 1, 2023
2 min read
On June 9, 2023, the SEC approved1 the NYSE's and Nasdaq's proposed clawback listing standards, including the amendments2 that delay the effective date of the rules to October 2, 2023. This effective date means that NYSE- and Nasdaq-listed issuers will be required to adopt compliant clawback policies no later than December 1, 2023 (i.e., 60 days after the October 2, 2023 effective date).
For more information on complying with the proposed listing standards, as well as a template clawback policy, see our prior alert, "Clawback Policies: Next Steps to Prepare Your Public Company."
The NYSE's amendment filed this week also makes clear that certain categories of issuers, such as foreign private issuers and companies listing only preferred or debt securities, will be required to comply with the new clawback listing standards like domestic issuers.3 In addition, it adds Section 802.01F of the NYSE Listed Company Manual, which provides for delisting procedures for non-compliance with the clawback rules similar to the NYSE’s compliance process for late SEC filings and include discretionary cure periods.4 Otherwise, both the NYSE’s and Nasdaq’s proposed amendments remain unchanged.5
1. The SEC’s approval of the NYSE amendment is available here. The SEC’s approval of the Nadaq amendment is available here.
2 The NYSE’s proposed amendment filed with the SEC on June 5, 2023 is available here. The Nasdaq proposed amendment filed with the SEC on June 6, 2023 is available here.
3. See proposed Section 303A.14 of the NYSE Listed Company Manual at page 35 of the NYSE's proposed amendment, available here.
4. The NYSE's initial proposal required immediate suspension of the trading of a listed issuer's securities and commencement of delisting procedures (with no cure period) if an issuer was non-compliant with any of the provisions of proposed Section 303A.14 of the NYSE Listed Company Manual. See proposed Section 802.01F of the NYSE Listed Company Manual at page 40 of the NYSE's proposed amendment available, here.
5. The NYSE's original proposal, filed with the SEC on February 22, 2023, is available here. The Nasdaq's original proposal, filed with the SEC on February 22, 2023, is available here.
White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.
This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
© 2023 White & Case LLP