The SEC final rules that require companies to disclose practices or policies on the ability of employees or directors to engage in hedging transactions with respect to company equity securities held or granted as compensation were published in the Federal Register. The effective date for the final rules is March 8, 2019.

If the company does not have any policies or practices on the matter, then the company must disclose that fact or note that hedging transactions are generally allowed. The final rules also specify that the equity securities for which disclosure is required include equity securities of the company, any parent or subsidiary of the company, or any subsidiary of any parent of the company. As previously covered, the final rules implement Exchange Act Section 14(j), which was enacted by Section 955 of the Dodd-Frank Act.

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