The SEC approved final rules that require companies to
disclose practices or policies on the ability of employees or
directors to engage in hedging transactions with respect to company
equity securities. The final rules implement Exchange Act Section 14(j), which was enacted
by Section 955 of the Dodd-Frank Act.
Specifically, the final rules require disclosure of hedging
practices in full, or a summary of those practices or policies that
include hedging transactions that are permitted. Under the final
rules, if the company does not have any policies or practices, the
company must disclose that fact or note that hedging transactions
are generally allowed. The final rules also specify that the equity
securities for which disclosure is required include equity
securities of the company, any parent or subsidiary of the company,
or any subsidiary of any parent of the company.
