USA: Comments sought on proposed rule to prohibit incentive-based pay that encourages inappropriate risk taking in financial institutions

Six federal agencies, including the Securities and Exchange Commission, have published for comment a proposed rule to prohibit incentive based pay that encourages inappropriate risk taking in financial institutions: see here (pdf). The proposed rule will implement section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. For an update on the SEC's progress in implementing the Act's rule-making requirements, see here.

USA: SEC adopts pay ratio disclosure rule

The Securities and Exchange Commission has this week adopted a final rule that will require certain public companies to disclose the ratio of the compensation of their chief executive officer to the median compensation of their employees: see here (pdf). The SEC was required to adopt such a rule in order to implement section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

A short fact sheet explaining the new rule is available here. An update on the SEC's progress in implementing the mandatory rule making provisions of the Dodd-Frank Act can be found here.

USA: SEC publishes disclosure rules on the relationship between executive pay and company financial performance

The Securities and Exchange Commission has published for consultation proposed rules that will require certain companies to disclose the relationship between executive pay and company financial performance: see here (pdf). A summary of the proposed rules is available here; they will implement section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010.

USA: SEC consults on hedging disclosure rule

The Securities and Exchange Commission has proposed rules the purpose of which is to implement Section 955 of the Dodd-Frank Wall Street Reform and Consumer Protection Act: see here (pdf). The rules will require companies to disclose whether directors and employees are permitted to engage in hedging transactions in respect of equity securities granted as compensation or otherwise held (directly or indirectly).

USA: Restricting proprietary trading - final rules to implement the 'Volcker rule'

Final rules to implement the so-called Volcker rule (as found in section 13 of the Bank Holding Company Act, inserted by section 619 of the Dodd-Frank Act) have been published: see here (pdf). An overview of the rules is available here.

USA: SEC publishes pay ratio disclosure rule

The Securities and Exchange Commission has published its proposals in respect of the obligation imposed on it, under Section 953 ("Executive compensation disclosures") of the Dodd-Frank Wall Street Reform and Consumer Protection Act, to require issuers to disclose (amongst other things) the ratio of the median of the total compensation of all employees to the annual total compensation of the chief executive officer: see here (pdf).

UK: FCA takes enforcement action against high frequency trader

The Financial Conduct Authority has, for the first time, taken enforcement action against a high frequency trader who engaged in market abuse. Using an algorithmic programme he had created, the trader placed thousands of false orders for Brent Crude, Gas Oil and Western Texas Intermediate futures from the US on the ICE Futures Europe exchange (ICE) in the UK. The FCA's decision notice is available here (pdf).

Action was also taken against the trader in the USA by the Commodity Futures Trading Commission in the first case to be brought in respect of the prohibition against disruptive practices introduced by section 747 of the Dodd-Frank Wall Street Reform and Consumer Protection Act: see here.

USA: prohibiting proprietary trading - SEC publishes proposed rules

The Securities and Exchange Commission, in conjunction with the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency, has published for comment proposed rules the purpose of which is to implement and clarify Section 619 ("Prohibitions on proprietary trading and certain relationships with hedge funds and private equity funds") of the Dodd-Frank Wall Street Reform and Consumer Protection Act: see here.

USA: SEC's new whistleblower scheme comes into effect

The SEC's new whistleblower scheme, introduced in consequence of the Dodd-Frank Wall Street Reform and Consumer Protection Act, came into force last week. Further information about the scheme is available here.

USA: credit rating agencies - amendments and new rules proposed by SEC

The Securities and Exchange Commission has published proposed new rules, and amendments to existing rules, regarding credit rating agencies: see here (pdf). An overview of the proposals is available here.

USA: Dodd-Frank - 'say on pay' rules adopted by SEC

The Securities and Exchange Commission yesterday adopted rules regarding shareholder approval of executive compensation and 'golden parachute' compensation arrangements: see here. The SEC's rules state that 'say on pay' votes required under the Dodd-Frank Act must occur at least once every three years beginning with the first annual shareholders' meeting taking place on or after January 21, 2011. Companies are also required to hold a 'frequency' vote at least once every six years in order to allow shareholders to decide how often they would like to be presented with the 'say on pay' vote.

USA: SEC proposes new whistleblower programme under the Dodd-Frank Act

The Securities and Exchange Commission has published proposed rules under Section 922 of the Dodd-Frank Wall Street Reform Act for a whistleblower program to reward individuals who provide the SEC with information leading to successful enforcement actions: see here (rule proposal, pdf) or here (press release/fact sheet). According to the press release:

To be considered for an award, a whistleblower must voluntarily provide the SEC with original information about a violation of the federal securities laws that leads to the successful enforcement by the SEC of a federal court or administrative action in which the SEC obtains monetary sanctions totaling more than $1 million.