SEC Adopts New Hedging Disclosure Requirement

In an effort to provide greater transparency to stockholders regarding employee and director incentives, the U.S. Securities and Exchange Commission (SEC) has adopted a final rule implementing a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This new rule requires companies to disclose in proxy or information statements relating to the election of directors any practices or policies (whether written or not) regarding the ability of its directors, officers and other employees (or any of their designees) to hedge any decrease in the market value of equity securities granted as compensation or held directly or indirectly by such individuals. As a result, public companies should review and assess their existing disclosures to determine whether they comply with the new requirements. Moreover, while the new disclosure requirements do not require companies to have any practices or policies regarding hedging or dictate the content of any such