NYSE and Nasdaq Propose Changes to Compensation Committee Independence Rules.

On Tuesday, September 25, 2012, the New York Stock Exchange ("NYSE") and the NASDAQ Stock Marker ("Nasdaq") filed proposed amendments to their listing standards to reflect the requirements of Rule 10C-1 under the Securities Exchange Act of 1934 (the "Exchange Act").  The Securities and Exchange Commission (the "SEC") adopted Rule 10C-1 pursuant to Section 10C of the Exchange Act, as created by Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act").  Rule 10C-1 directs the national securities exchanges, including NYSE and Nasdaq, to establish listing standards that, among other things, require each member of a listed issuer’s compensation committee to be an "independent" member of the board of directors, as defined in the listing standards of the national securities exchanges adopted in accordance with SEC rules.

Read the Nasdaq rule

Federal Court Vacates and Remands the CFTC's Position Limits Rule.

On Friday, September 28, 2012, Judge Robert L. Wilkins of the United States District Court for the District of Columbia issued a memorandum opinion granting International Swaps and Derivatives Association's and Securities Industry and Financial Markets Association's motion for summary judgment challenging the Commodity Futures Trading Commission ("CFTC") rules setting position limits on derivatives tied to 28 physical commodities.  The CFTC approved the position limit rules on October 18, 2011, ostensibly pursuant to Section 4a of the Commodity Exchange Act as amended by Title VII of the Dodd-Frank Act.

Judge Wilkins held that it is ambiguous if Section 4a provides statutory authority for the rules and therefore vacated and remanded the rules to the CFTC for further proceedings consistent with the court's ruling.  The CFTC may be considering appealing this decision.  In response to the ruling, CFTC Chairman Gary Gensl said in a statement, “I believe it is critically important that these position limits be established as Congress required.  I am disappointed by today’s ruling, and we are considering ways to proceed.”

Read the NY Times dealbook coverage

Read the court opinion

© 2012 Perkins Coie LLP