SEC Mandates Hedging Policy Disclosures Measures

On December 18, 2018, the SEC approved final rules requiring companies to disclose any practices or policies permitting employees or directors to engage in specified hedging transactions with respect to company equity securities. Chairman Clayton stated that the new rules are designed to benefit investors by providing increased clarity to share ownership and incentives. The final rules implement a mandate from the Dodd-Frank Act, which permits companies to disclose either a summary or a full description of the practices or policies that apply. A registrant that does not have any such practices or policies is to either disclose that fact or state that hedging is generally permitted. The SEC press release is available here, and the Sullivan & Cromwell memorandum on the topic is available here.