Client Advisories and Bulletins

SEC Approves NYSE And NASDAQ Corporate Governance Rules

November 2003

On November 4, 2003, after more than a year of consideration and negotiations, the Securities and Exchange Commission (SEC) approved new corporate governance rules for companies with securities listed on the New York Stock Exchange (NYSE) and companies with securities listed on The NASDAQ Stock Market (NASDAQ). Companies with securities listed on either the NYSE or NASDAQ must now comply with the final rules approved on November 4, 2003, in addition to the rules promulgated by the SEC pursuant to the Sarbanes-Oxley Act of 2002 (the "S-O Act").

In general, the new rules require a majority of each company’s board to be comprised of independent directors, impose stricter definitions of independence, require independent directors to meet in executive session, require independent directors to approve director nominations and executive officer compensation, and require the establishment of a publicly available code of conduct for all employees and directors.