Over thirteen years after the Dodd–Frank Wall Street Reform and Consumer Protection Act added Section 10D to the Securities Exchange Act of 1934 (the “Exchange Act”), the Securities and Exchange Commission’s (“SEC”) clawback rules became effective on October 2, 2023 (the “Clawback Rules”).
Companies listed on national exchanges such as the New York Stock Exchange (“NYSE”) and the Nasdaq Stock Market (“Nasdaq”) will be required to adopt clawback policies by December 1, 2023 and comply with their respective listing standards. Companies, executives and advisors have understandably been grappling with how to ensure compliance with these new Clawback Rules. Below, we address some common questions that we have received.