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SEC’s New Compensation Claw-Back Rule: Impacts for Canadian Companies Listed on a U.S. Exchange

Last year, the SEC adopted a final rule regarding Recovery of Erroneously Awarded Compensation. This will have insurance implications for Canadian companies listed on U.S. stock exchanges.

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The Compensation Claw-back Rule requires all publicly traded companies listed on a U.S. exchange to adopt, enforce, and disclose mandatory claw-back policies for incentive-based executive compensation erroneously received by current or former executives where that company has had to restate its financials.

This was previously mandated under s. 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).