SEC Adopts Final Rules to Disclose Hedging Policies

  • United States
  • 01/07/2019
  • © 2019 Morgan, Lewis & Bockius LLP

The US Securities and Exchange Commission issued final rules on December 20, 2018, requiring companies to disclose, in proxy or information statements for the election of directors, their policies and procedures on the ability of employees and directors to engage in certain hedging transactions with respect to company securities. The final rules closely track the 2015 rules proposed by the SEC pursuant to the mandate under the Dodd-Frank Wall Street Reform and Consumer Protection Act to adopt rules to enhance corporate disclosure of hedging policies applicable to employees and directors. SEC Chairman Jay Clayton stated that the final rules, together with existing reporting requirements regarding insider transactions in company securities, would serve to “bring increased clarity to share ownership and incentives” of company insiders.