On June 9, 2023, the U.S. Securities and Exchange Commission (SEC) published notices and orders granting accelerated approval of the amended clawback-related listing standards proposed by the New York Stock Exchange (NYSE) and The Nasdaq Stock Market LLC (Nasdaq) earlier this week. The amended versions of the NYSE and Nasdaq listing standards were discussed in our previous post.
The approved versions of the NYSE and Nasdaq clawback-related listing standards provide for an effective date of October 2, 2023. This means that listed issuers will be required to adopt a compliant clawback policy no later than Friday, December 1, 2023, and the clawback policy must apply to incentive-based compensation received (as defined in the stock exchange listing standards) by executive officers on or after October 2, 2023.
The clawback-related listing standards will be set forth in new Section 303A.14 of the NYSE Listed Company Manual, and new Nasdaq Rule 5608. These listing standards track closely to the requirements in Rule 10D-1 under the Securities Exchange Act of 1934, which directed the national securities exchanges to implement listing standards requiring listed issuers to adopt and comply with a written clawback policy, and provide certain disclosures relating to the clawback policy in the applicable SEC filings, or be subject to delisting. For a more detailed discussion of the requirements under Rule 10D-1, please see our previous Client Alert.
The SEC’s notice and order granting accelerated approval of the NYSE’s proposed listing standards is available here, and the SEC’s notice and order granting accelerated approval of Nasdaq’s proposed listing standards is available here.