On April 2, 2021, the US Securities and Exchange Commission (SEC) approved, effective immediately, permanent rules changes proposed by the New York Stock Exchange (NYSE) to the NYSE’s shareholder approval rules for certain security issuances to related parties and those above the 20% threshold, and clarified the definition of and procedure for audit committee approval of related party transactions.

The rule changes to the shareholder approval requirements are substantially the same as the temporary waivers granted by the SEC through the end of 2020 (which we previously reported on here and here). These shareholder approval changes better align the NYSE’s shareholder approval rules with those of the Nasdaq and the NYSE American markets. However, the clarifications to the related party transactions approval process were new and are likely to impact the audit committee’s process for approval of related party transactions. Continue reading >