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Where In The World Is An Issuer's Home Country?

The Securities and Exchange Commission's proposed rules setting listing standards for recovery of erroneously awarded compensation would allow exchanges to permit foreign private issuers to forgo recovery as impracticable if the recovery of erroneously awarded compensation pursuant to Section 10D would violate the home country’s laws so long as certain other conditions are satisfied.  Although the SEC current rules define "foreign private issuer" (Rule 3b-4), neither the proposed rules nor any other rule defines "home country".

This is not to say that you won't find "home country" in several of the SEC's current rules.  See Rules 10A-3, 13e-4, 14d-10, and 3a67-10.  Not being a slave to consistency, the SEC's Rule 10A-3 and Rule 13e-4 also employ the term "home jurisdiction".  To add to the confusion, Rule 13k-1 also uses the term "home jurisdiction" but provides a different definition than Rule 13e-4(i).

I did find a definition of the term "home country" in Form 20-F:

Home country - This term refers to the jurisdiction in which the company is legally organized, incorporated or established and, if different, the jurisdiction where it has its principal listing.

This definition actually admits the possibility that a foreign private issuer will have two home countries.

My own hope is that the SEC will recognize that it erred because (i) it failed to recognize that domestic issuers may face state law constraints on recoupment; and (ii) applicable law may be determined by the law of a jurisdiction other than the issuer's jurisdiction of incorporation.  If the SEC retains the idea of "home country", it should at a minimum let us know what it means.

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30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
Partner at Allen Matkins
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