A few months ago, I blogged about four things to do now that the NYSE has changed its related party transaction rule. I had mentioned that parts of the rule change were a sleeper – including the fact that the NYSE’s rule change defined “related party transaction” the same way as the SEC’s Reg S-K Item 404, but without regard to the $120,000 transaction value threshold.

That decision to not reference the $120,000 transaction value threshold led companies and practitioners to begin to comb through policies, board charters and governance guidelines to update them for this NYSE rule change. Perhaps an unintended consequence. And perhaps leading to the NYSE to now change its rule again to essentially reinstate the $120,000 threshold. That’s good news (but maybe a little late for some)!

The NYSE’s rule change is not yet operative – not until at least 30 days after the rule filing (roughly mid-September). When the proposed rule change becomes operative, it will be amended on the NYSE’s website.

Note that some companies may still need to amend related party policies to address other parts of the prior rule change – mainly the need for prior review of transactions – but this change should alleviate the need for more changes.

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Photo of Jason Day Jason Day

Jason Day is the firmwide chair of the Corporate practice and a member of the firm’s Executive Committee. Jason serves as a trusted advisor to public companies on their most sensitive securities and corporate governance matters. He regularly counsels public company boards of…

Jason Day is the firmwide chair of the Corporate practice and a member of the firm’s Executive Committee. Jason serves as a trusted advisor to public companies on their most sensitive securities and corporate governance matters. He regularly counsels public company boards of directors and management on SEC disclosure obligations, fiduciary duties, internal investigations, proxy advisory firm standards and stockholder activism matters.

Jason has represented issuers and underwriters in dozens of capital markets offerings, including underwritten equity and debt offerings, initial public offerings, Rule 144A offerings and convertible note offerings, among others. He also counsels companies and their boards on public company change in control transactions, including mergers, tender offers, and SPAC transactions.