Clawbacks Approval Date Moves to June 11

As previously reported, earlier this month the Center and other groups led the submission of a stakeholder letter to the SEC requesting that the Commission allow the new clawbacks listing standards for NYSE and Nasdaq to be effective no sooner than November 28, 2023, the deadline specified in the Adopting Release, and for companies to have 60 days after that date to adopt their clawback policies.  The letter was generated after concerns were raised that the SEC might approve the new listing standards much sooner than anticipated – possibly by the end of April.

Our effort seems to have been partially successful: the SEC posted letters to each stock exchange that it would in fact allow a longer implementation period for clawbacks in response to our comments. However, the SEC specified an effective date of June 11^th (oddly, a Sunday) – better than the original April 27^th, but not the November date we had hoped for. If the SEC in fact approves the standards by June 11^th, they will go into effect on that date, and companies will have 60 days to comply (August 10^th or close to that date).

The only avenue left to a longer implementation period is for the exchanges to amend their own proposals to change the effective date, but this does not seem likely. Companies should be prepared for a compliance date of August 10^th and should start making plans now – take a look at WTW’s excellent three-part compliance series for a starting point.