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Re-Proposed Rule on Incentive-Based Compensation Issued

A 2011 proposed rule published in the Federal Register has been re-proposed by the Securities and Exchange Commission and other agencies. The agencies seek to amend the rule to implement section 956 of the Dodd-Frank Act, which would create general requirements for incentive-based compensation arrangements. Similar to the 2011 version, the re-proposed rule would ban incentive-based compensation at financial institutions that might promote inappropriate risks by offering excessive compensation or cause a material loss. The new proposal, however, incorporates the agencies’ supervisory experiences since the proposal was originally issued five years ago.

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