SEC Proposes Disclosure Regarding Hedging Policies

On February 9, 2015, the SEC issued a proposing release to implement certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"). This proposed rule will require companies to disclose whether employees and directors are permitted to or prohibited from engaging in hedging transactions offsetting any decrease in the market value of equity securities issued by the company or specified affiliates of the company. Currently, companies must include in their Compensation Discussion and Analysis ("CD&A") disclosure describing any policies regarding hedging of economic risk by named executive officers, if material.

The current proposal does not require companies to prohibit hedging transactions or adopt policies addressing them. However, it does require companies to disclose whether any employee or director is permitted to engage in hedging transactions. Companies that elect to prohibit only specified hedging transactions must disclose