American Stock Exchange Sets New Reporting Requirements
Highlights of the new reporting requirements:
- Each Amex-listed company must adopt and disclose a code of ethics and compliance program.
- Each foreign Amex issuer must summarize in its annual proxy statement any material differences between Amex requirements and corporate governance practices followed in its home country.
- Amex-listed companies must make timely public disclosure of board changes and vacancies and auditor "going concern" opinions.
Highlights of the new governance requirements:
- Amex-listed companies must obtain shareholder approval of all stock option plans subject to limited exceptions, and brokers will not be permitted to vote their customers' shares on stock option plan proposals without instructions from the customer.
- All related party transactions entered into by Amex-listed companies must be subject to oversight by the audit committee.
- Amex-listed company audit committees must be responsible for selecting the independent auditor and must meet privately with the independent auditor.
- Audit committee chairs of Amex-listed companies must be financially sophisticated and all members of the audit committee must be financially literate at the time of appointment.
The new rules have been submitted to the U.S. Securities and Exchange Commission (SEC) for review and approval. It is anticipated that the disclosure requirements will become effective immediately after the SEC's approval. Other proposed changes will likely become effective six months after the SEC's approval, except that the requirements applicable to board and audit committee composition will become effective two years following the SEC approval of the proposed rule change, unless earlier implementation is otherwise required by SEC rules adopted pursuant to the Sarbanes Act.