SEC Chairman Says Dodd-Frank Rulemaking Will Proceed

February 19, 2018

For public companies wondering when long-pending Dodd-Frank rules will hit, SEC Chairman Jay Clayton has promised action. In a January 22 speech at the Securities Regulation Institute, Chairman Clayton assured those present that “It is the SEC’s obligation to complete the rules mandated by Congress in Dodd-Frank,” but noted that “We will have to be flexible in timing, in sequence and in content.” Currently there are at least four governance areas still in need of final rules, namely pay-versus-performance (proposed April 2015) executive pay clawbacks (proposed July 2015), disclosure of hedging policies (proposed February 2015) and disclosures about payments made by resource extractors (proposed December 2015).

Chairman Clayton chided his audience for not always treating initial coin offerings (ICOs) as securities, but focused mainly on Dodd-Frank rulemaking. In this regard, he focused on compensation clawbacks, noting that a number of companies have already publicly disclosed their policies, including some that “go beyond what would be required under Dodd-Frank.” Such “market developments … have, at least in part, mitigated some of the concerns that motivated the statutory requirements.” With respect to resource extraction disclosure (also mentioned in a February 1 speech by William Hinman, director of the SEC’s Division of Corporation Finance), Chairman Clayton said that he has asked SEC staff to craft rules that would “meet the objectives of Congress, take into account [an] array of procedural and substantive constraints, and bring finality to these matters.” He made no special mention of pay-for-performance, hedging or conflict mineral disclosure, the last of which has been under review since April 2017, according to this SEC guidance.

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