On July 1, 2015, in a 3-2 vote of commissioners cast along party lines, the Securities and Exchange Commission (the “SEC”) proposed rules to implement Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”). Proposed Exchange Act Rule 10D-1 would prohibit the national securities associations and exchanges from listing any securities of an issuer that does not develop, implement, and disclose a policy requiring the recovery of excess incentive-based compensation received by an executive officer when the issuer needs to correct erroneous financial data by preparing an accounting restatement.

The proposed rules also would: amend Regulation S-K by adding Item 402(w); amend the forms by which both domestic issuers and foreign private issuers file their Exchange Act annual reports, and, for certain investment companies, amend Form N-CSR and Schedule 14A. In addition to requiring disclosure regarding the listed issuers’ recovery policies, these amendments would require disclosure about actions taken pursuant to a recovery policy.

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