Comments on proposed SEC rule change to require listed companies to publicly disclose compensation or other payments by third parties to board of directors members or nominees

SUMMARY

The Securities Regulation Committee (Marc Rossell, Chair) responded to the request of the Securities and Exchange Commission (the “Commission”) for comment regarding the above-referenced proposed rule change filed with the Commission by The NASDAQ Stock Market LLC (“Nasdaq”). The Committee requested that the proposed rules not be adopted. The Committee believes that the Commission should instead determine whether existing SEC disclosure requirements already address the disclosures covered in the proposed Nasdaq rule change, and cited examples of where such overlap already seems to occur. The Committee argued that it would be more effective and appropriate to address any proposed new disclosure requirements through the SEC’s Disclosure Effectiveness Project, in order to promote desirable uniformity in the nature of required disclosures to investors about director compensation arrangements at public companies, without differentiation based on the exchange on which a company’s securities are listed.