On June 20, 2012, the Securities and Exchange Commission issued final rules directing the national securities exchanges to adopt listing standards related to the independence of compensation committees and their selection of advisers. SEC rulemaking on these topics was required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which prohibits national securities exchanges from listing any equity security of an issuer that is not in compliance with the exchange’s compensation committee independence and adviser requirements. The final rules also specify the disclosures required for compensation consultant conflicts of interests. The final rules largely mirror the proposed rules issued by the SEC in March 2011.
View full memo, "SEC Issues Final Rules on Independence of Compensation Committees and Their Advisers"