SEC Finalizes Rules Under Dodd-Frank Act Implementing Independence Standards For Compensation Committees And Compensation Advisors

On June 20, 2012, the Securities and Exchange Commission (SEC) issued final rules under Section 10C of the Securities Exchange Act of 1934 (Section 10C), as added by Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The final rules direct national securities exchanges (e.g., the NYSE and NASDAQ) to incorporate independence standards for compensation committees and compensation advisors into their listing standards. In addition, the SEC adopted amendments to the proxy disclosure rules regarding the use of compensation consultants and any related conflicts of interest.

National securities exchanges will have 90 days from when the final rules are published in the Federal Register to propose listing standards and one year from the date of publication to finalize the standards. The revised proxy disclosure rules, which are not subject to the immediately preceding rulemaking process, generally are effective for proxy