On Wednesday, April 24, 2023, the U.S. Securities and Exchange Commission (“SEC”) announced that it will extend, from April 27, 2023 to June 11, 2023, the date by which the SEC will either approve, disapprove or institute proceedings to determine whether to disapprove the proposed rule changes of the Nasdaq Stock Market (“Nasdaq”) and the New York Stock Exchange (“NYSE”) relating to the requirement for issuers to implement and disclose “no fault” clawback policies providing for the recovery of erroneously awarded compensation.
The SEC decided to designate a longer period within which to take action on the proposed rule changes so that it has sufficient time to consider the proposals and the comments received.
Once the Nasdaq and NYSE rules are finalized, issuers will then be required to adopt a clawback recovery policy no later than 60 days following the date on which the listing standard adopted by their listing securities exchange becomes effective. Per the SEC’s final adopted rules, all listing exchanges will be required to have their applicable listing standards effective no later than November 28, 2023, although it remains possible the effective dates may be earlier.
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