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SEC Proposes Rules on Disclosure of Hedging by Employees, Officers and Directors

February 9, 2015Articles

Earlier today, the Securities and Exchange Commission proposed new rules that would enhance corporate disclosure of company hedging policies for directors and employees, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The newly proposed rules would require disclosure about whether directors, officers and other employees are permitted to hedge or offset any decrease in the market value of equity securities granted by the company as compensation or held, directly or indirectly, by employees or directors. The proposed rules would require disclosure in proxy and information statements for the election of directors and apply to companies subject to the federal proxy rules, including smaller reporting companies, emerging growth companies, business development companies and registered closed-end investment companies with shares listed and registered on a national securities exchange. To read the proposed rules, click here.

The SEC is seeking public comment on the proposed rule amendments for 60 days following their publication in the Federal Register. If you are interested in:

  • Commenting on the proposed rules or
  • Determining what policies and procedures the proposed rules would require, we can assist and answer your questions.

Contact your Dinsmore attorney to learn more.