By notices released last week, the U.S. Securities and Exchange Commission (the “SEC”) has now designated June 11, 2023 as the date by which it will approve or disapprove the clawback-related listing standards proposed by New York Stock Exchange (“NYSE”) and Nasdaq pursuant to the SEC’s Rule 10D-1. If the SEC approves the listing standards proposed by NYSE and Nasdaq by June 11, listed issuers would be required to adopt a compliant clawback policy by August 10, 2023.
Each of NYSE’s proposed new Section 303A.14 of the NYSE Listed Company Manual and Nasdaq’s proposed Listing Rule 5608 provide that the rule will be effective on the date the SEC approves the rule filing. It is possible that the exchanges could amend their proposed listing standards to specify a later effective date, or the SEC could further extend the period to approve the proposed listing standards. Under Rule 10D‑1, the latest possible effective date is November 28, 2023. Listed issuers will have 60 days from the effective date of the listing standards to adopt a compliant clawback policy.
To further assist issuers in preparing for the effective date, we have drafted a model Dodd-Frank clawback policy that complies with the listing standards proposed by NYSE and Nasdaq. This model policy will assist issuers when adopting a new clawback policy or revising an existing policy to comply with the rules. The model policy can be accessed at the following link: https://www.debevoise.com/-/media/files/insights/publications/2023/05/debevoise-model-clawback-policy.pdf