On Feb. 7, 2011, the Federal Deposit Insurance Corporation (FDIC) approved a proposed rule regarding incentive-based compensation at covered financial institutions pursuant to Section 956 of the Dodd-Frank Wall Street and Consumer Protection Act, 12 U.S.C. §5641 (2010). Subsequently, the National Credit Union Administration (NCUA) (Feb. 17) and the Securities and Exchange Commission (SEC) (March 2) approved their own versions of the proposed rule (each version being very much the same as the FDIC’s). Four other agencies are expected to approve their own similar versions of the proposed rule shortly.1
Pursuant to Dodd-Frank Section 956, these regulators are coordinating in a joint-interagency rulemaking process. All seven agencies must approve the proposed rule before it is published as a proposed rule in the Federal Register, after which there will be a 45-day comment period. It is expected that the seven versions of the rule will essentially mirror one another, subject to certain inevitable differences such as those reflecting the jurisdictions of the different agencies.2 The final version of the rule will go into effect six months after its publication (expected to be jointly issued) in the Federal Register.
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