In a welcome development, the NYSE filed a proposed rule change with the SEC that effectively unwinds part of its recently amended related party transactions rule, Rule 314.00, in recognition of the fact that the amendment’s exclusion of the Reg. S-K Item 404 $120,000 transaction value and materiality thresholds (we reported on here) is inconsistent with long-standing company practices and poses unintended consequences. According to a member Quick Survey we conducted in May (reported on here), more than 20% of companies were at that time updating or had updated their applicable committee charters, related transaction policies, or other relevant governance documents in response to the amendment, and another 24% were unsure or were evaluating whether to do so. In view of the new proposal, which is effective immediately but remains open for public comment and SEC review, companies may wish to review or re-review their policies.
See these briefings from Gibson Dunn, Goodwin, and Stinson and additional information & resources on our NYSE and Related Party Transactions pages.
This post first appeared in the weekly Society Alert!