The Dodd-Frank Act

Nasdaq was vigorous in our engagement with Congress and the Administration to empower public companies, decrease regulation of public companies and reform Wall Street in ways that will keep our economy and business environment stable. While the legislation is not perfect and affects some industries more than others, we think our contributions to the process had a positive impact on the final product:

SOX 404: 

Working with the Biotechnology Industry Association (BIO), the technology industry and others that were members of a broad coalition of businesses, Nasdaq supported provisions to provide a complete exemption from SOX 404(b) for smaller companies. Nasdaq was the first exchange to support an amendment authored by Reps. Scott Garrett (R-NJ) and John Adler (D-NJ) during House Financial Services Committee consideration of the bill. The final version of the legislation provides the exemption for companies under $75 million in market capitalization from SOX 404(b).


From start to finish Nasdaq supported two common sense approaches to the regulation of derivatives -- requiring the clearing and trading of only standardized derivatives, and a functional exemption for corporate end-users. Some in Congress wanted to force all companies to clear and exchange trade all of their derivatives. Nasdaq also supported the principal that corporate derivatives users that had an exemption available to them should still be able to choose to clear if they wanted and would have the choice of where to clear their derivatives. This is known as “clearing choice” and is included in the bill.

SEC Rulemaking Reform: 

Nasdaq worked with a coalition of exchanges to include important reforms to how the Securities and Exchange Commission evaluates our rule proposals. This includes changes to our rules aimed at helping our listed companies in an untold numbers of ways. This would end the pocket-veto that our rule changes suffer from time to time…and it’s in the bill.

Litigation Threats: 

Nasdaq worked with the Chamber of Commerce and others to fight-off attempts to reverse the important Stoneridge v. Scientific-Atlanta case. This reversal would have allowed an entirely new category of private securities class actions with dire consequences for investors and the economy. Reversal of Stoneridge would have raised litigation costs for every company in America, undermining our competitiveness. It was not in the final bill.

Executive Compensation/Corporate Governance: 

Nasdaq worked with a broad coalition to ensure that corporate governance provisions of the bill were workable and did not tip the balance between shareholder, management and directors’ influence. A requirement that directors be elected by majority vote was eliminated from the final bill. The bill grants shareholders the right to a non-binding vote on executive pay and benefits. The bill does not mandate a proxy access regime, but gives the SEC authority to engage in a rule-making, open to public comment, to determine any changes in this area. Because of U.S. Chamber and Business Roundtable legal threats, the SEC has postponed action on proxy access.

Nasdaq Public Policy Advocates

Advocating for ambitious companies
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