January 14, 2013

NYSE & Nasdaq File New Amendments to Proposed “Compensation Committees and Advisers” Listing Standards

With the SEC staring at yesterday’s deadline for its extension to approve the NYSE & Nasdaq proposals to comply with Rule 10C-1 under the Exchange Act comes this news from Davis Polk’s Ning Chiu on Friday:

Both the NYSE and Nasdaq have filed further amendments to their proposed listing standards on compensation committees and their advisers. The amendments copy directly from the exception in Item 407(e)(3)(iii) of Regulation S-K with respect to the proxy disclosure rules for compensation consultants.

The amendments clarify that a compensation committee is not required to conduct the independence assessment of an adviser whose role is limited to (a) consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors, and that is available generally to all salaried employees or (b) providing information that either is not customized or that is customized based on parameters that are not developed by the adviser, and about which the adviser does not provide advice.

The SEC enhanced proxy disclosure rules in December 2009 permitted these exceptions in response to commentators who suggested that broad-based, non-discriminatory plans and the provision of information, such as surveys, that are not customized, should not be treated as compensation consulting services that would raise conflict of interest concerns.

The NYSE amendment also added language indicating that nothing in the section requiring a compensation committee to consider the specific adviser independence factors is intended to limit compensation committees from selecting or receiving advice from any adviser that they prefer, including ones that are not independent. NASDAQ already had a similar statement.

My ten cents: Given that the SEC’s deadline to act was yesterday – and a statement is in both the exchange’s latest amendments saying they don’t consent to an additional extension for the SEC to act – maybe the SEC will approve the amendments today or soon enough. Since a portion of the new rules will be effective July 1st, they have to give companies time to comply…

FINRA Releases Interim Form for Crowdfunding Portals

Here’s something blogged on Friday by Vanessa Schoenthaler in the “100 F Street” Blog:

Last week, FINRA announced that it would begin accepting information on a voluntary basis from prospective crowdfunding portals. FINRA will use the information to better understand the funding portal community and to develop specific funding portal rules.

Prospective crowdfunding portals are encouraged to submit an Interim Form for Funding Portals (“IFFP”) as well as any additional information or documentation that might be helpful to FINRA at: FINRA will treat the information submitted on a confidential basis.

The IFFP covers general business information, ownership structure, sources of funding , information about management, compensation and a prospective crowdfunding portal’s business model.

Once the SEC and FINRA adopt final crowdfunding portal rules any prospective funding portals that file an IFFP will still have to file an application to become a FINRA member.

Mailed: November-December Issue of The Corporate Counsel

We recently mailed the November-December issue of The Corporate Counsel that includes pieces on:

– Say-on-Pay Arrives for Smaller Reporting Companies: Compliance Tips
- D&O Questionnaire Changes
- Hedging and Pledging Policies
- An Update on Say-on-Pay 2.0 Proxy Litigation
- Complying with the New Iran Sanctions Periodic Reporting Disclosure: New Staff CDIs Offer Guidance
- Affiliate-Donor’s Form 144–Staff Says Affiliate Should Include Aggregated Donee Sales in Table II
- Effective Date of the Audit Letter
- Our SEC Rulemaking Status Chart
- New Auditing Standard Adopted: No Changes to the Audit Committee Report Yet

Act Now: Get this issue rushed to when you try a 2013 No-Risk Trial today.

– Broc Romanek