In expanding some definitions from the proposed—but never finalized—2015 rule, the SEC will have companies review whether previously “identified unadjusted errors” should be reported as “material” in current financial reports.

The proposal also details compliance with the provision that requires companies to adopt, disclose, and comply with a compensation clawback policy or else they’ll face delisting from a stock exchange. “I believe we have an opportunity to strengthen the transparency and quality of corporate financial statements, as well as the accountability of corporate executives to their investors,” said SEC Chair Gary Gensler.

The proposed definition wouldn’t require a clawback where an issuer’s previously issued financial statements are required to be restated in order to correct errors that weren’t material to those statements, but it would result in a material misstatement if (a) the errors were left uncorrected in the current report or (b) the error correction was recognized in the current period. Darla C. Stuckey, president and CEO of the Society for Corporate Governance, stated, “Such an interpretation would greatly broaden the potential scope of this listing standards rule and could force significantly more companies to pursue the recovery of incentive compensation.”

Under the Dodd-Frank Act, companies must recover the amount of compensation received in excess of the amount that should have been received, had the measurement been compliant, in the three-year period leading up to the restatement. The proposed rules would apply to any listed company, which includes even those companies whose only listed securities are debt securities or preferred stock.

In its proposed rule, the SEC referred to a research paper by Rachel Thompson of North Dakota State University, which found that one-third of revisions of financial statements meet at least one materiality criterion. It stated, “Overall, this evidence suggests that materiality discretion is being used opportunistically to conceal material misstatements as revisions.”

Many business groups such as the Business Roundtable and the U.S. Chamber of Commerce had opposed numerous aspects of the clawback rule proposed in 2015. Jeff Mahoney, general counsel at the Council of Institutional Investors, said, “The 2015 language was not consistent with the language and intent of Section 954 of Dodd-Frank. The new proposed rule is more consistent.”

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