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of the board of directors of the issuer, or any designee of such employee or member, is permitted to purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to hedge or offset any decrease in the market value of equity securities— ‘‘(1) granted to the employee or member of the board of directors by the issuer as part of the compensation of the employee or member of the board of directors; or ‘‘(2) held, directly or indirectly, by the employee or member of the board of directors.’’.

SEC. 956. ENHANCED COMPENSATION STRUCTURE REPORTING. 12 USC 5641.
(a) ENHANCED DISCLOSURE AND REPORTING OF COMPENSATION
ARRANGEMENTS.—
(1) IN GENERAL.—Not later than 9 months after the date Deadline.
of enactment of this title, the appropriate Federal regulators Regulations.
jointly shall prescribe regulations or guidelines to require each
covered financial institution to disclose to the appropriate Fed-
eral regulator the structures of all incentive-based compensa-
tion arrangements offered by such covered financial institutions
sufficient to determine whether the compensation structure—
(A) provides an executive officer, employee, director,
or principal shareholder of the covered financial institution
with excessive compensation, fees, or benefits; or
(B) could lead to material financial loss to the covered
financial institution.
(2) RULES OF CONSTRUCTION.—Nothing in this section shall
be construed as requiring the reporting of the actual compensa-
tion of particular individuals. Nothing in this section shall
be construed to require a covered financial institution that
does not have an incentive-based payment arrangement to
make the disclosures required under this subsection.
(b) PROHIBITION ON CERTAIN COMPENSATION ARRANGEMENTS.— Deadline.
Not later than 9 months after the date of enactment of this title, Regulations.
the appropriate Federal regulators shall jointly prescribe regula-
tions or guidelines that prohibit any types of incentive-based pay-
ment arrangement, or any feature of any such arrangement, that
the regulators determine encourages inappropriate risks by covered
financial institutions—
(1) by providing an executive officer, employee, director,
or principal shareholder of the covered financial institution
with excessive compensation, fees, or benefits; or
(2) that could lead to material financial loss to the covered
financial institution.
(c) STANDARDS.—The appropriate Federal regulators shall—
(1) ensure that any standards for compensation established
under subsections (a) or (b) are comparable to the standards
established under section of the Federal Deposit Insurance
Act (12 U.S.C. 2 1831p–1) for insured depository institutions;
and
(2) in establishing such standards under such subsections,
take into consideration the compensation standards described
in section 39(c) of the Federal Deposit Insurance Act (12 U.S.C.

LAWS 1831p– 9 1(c)). (d) ENFORCEMENT.—The provisions of this section and the regu- lations issued under this section shall be enforced under sectionPUBLIC with on anorris VerDate Nov 24 2008 03:41 Aug 28, 2010 Jkt 089139 PO 00203 Frm 00531 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203