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NYSE Rule Temporarily Extends Deadline for Brokers to Send Physical Proxy Materials

On April 23, 2020, the New York Stock Exchange (NYSE) proposed a temporary rule change of NYSE Rule 451(b)(1) with immediate effectiveness that extends the deadline by which NYSE member organizations (typically broker/dealers) under selected circumstances must send physical copies of proxy materials to beneficial owners. In light of delays related to the novel coronavirus (COVID-19) pandemic, the NYSE designed the modification with the intention of helping issuers meet their quorum requirements at shareholder meetings and possibly alleviating the need for adjournments or postponements. The temporary rule change applies only to shareholder meetings scheduled to be held up to and including May 31, 2020.
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NASDAQ Amends Rule Filing on Disclosure of Third-Party Compensation for Directors and SEC Extends Review Period

The SEC has extended to July 4, 2016, as the deadline for taking action on NASDAQ’s proposal requiring its listed companies to disclose any third-party compensation payments related to candidacy or service as directors on the companies’ boards.

We previously discussed the rule proposal here. Last week NASDAQ amended the rule filing so that the disclosure must be made in the proxy statement for any shareholder meeting that elects directors, not just at annual meetings. Alternatively, the disclosure could be posted on a company’s website.

The amendment also explicitly identifies indemnification arrangements under the rule proposal’s already broad definition of compensation.
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NASDAQ Proposes Requiring Companies to Disclose Outside Compensatory Payments to Directors

The SEC has published a proposed Nasdaq listing standard for public comment. Comments are due 21 days after publication in the Federal Register, which occurred yesterday.

If adopted, effective June 30, 2016, NASDAQ-listed companies will be required to publicly disclose any agreements with a director or nominee if anyone other than the company provides compensation in connection with that person’s candidacy or service as a director. The rule is intended to be construed broadly to include payments such as health insurance premiums. The information must be made available on a company’s website or proxy statement (or Form 10-K or 20-F if the company is not required to file a proxy statement).
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Nasdaq Provided Limited Discretion to Allow Cure Periods for Non-Compliance with Annual Meeting Requirements

The SEC has approved rule changes to allow the staff of Nasdaq’s listing qualifications department limited discretion to grant a listed company time to comply with the requirement to hold an annual meeting.

Nasdaq standards require companies to hold an annual meeting no later than one year after the end of the company’s fiscal year. If a company fails to comply, Nasdaq must issue a delisting determination, subjecting the company to immediate suspension and delisting unless the company requests a hearing. In many other instances of non-compliance with listing standards, a listed company is allowed 45 calendar days to submit a plan of compliance, and the Nasdaq staff may permit up to 180 days to fix the issue.
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