Exchanges Must Require Compensation Advisers To Be Independent

On June 20, 2012 the US Securities and Exchange Commission released a final rule (the "SEC's new rule"), under Section 10C of the Securities Exchange Act of 1934 (Section 10C") which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank Act"). It was published in the Federal Register on June 27, 2012. The SEC's new rule requires national securities exchanges to adopt listing standards that mandate that compensation committees of public companies:

• Be composed solely of independent board members.
• Have authority to hire and pay compensation advisers, including consultants and legal counsel (and to be provided funds to do so).
• Consider six enumerated independence factors before selecting a compensation adviser. This independence assessment is also required with respect to any adviser that provides advice to the committee (other than in-house counsel, as discussed below).