Compensation Committee Independence refers to the independence and conflict of interest requirements for Board compensation committees imposed by the SEC through the listing standards of the NYSE and NASDAQ. Section 952 of the Dodd-Frank Act mandated the SEC adopt rules requiring the national exchanges to prohibit the listing of any company not meeting the independence requirements for compensation committees. The June 2012 SEC regulations, which were adopted by the NYSE and the NASDAQ, do not provide a bright-line rule with regards to independence standards. Instead, the SEC rule gives the board discretion to determine whether a director is independent according to several factors, most having to do with previous work or consulting done for the company as well any other personal relationship which threaten to taint the independence of the director. The NYSE adopted the SEC rules near verbatim, making only small additions the rules which supplemented its exiting compensation committee and independence rules. The NASDAQ however did not require a compensation committee prior to the rules adoptions, and so it had to make more significant changes to its own listing standards to adopt the SEC’s rules. The SEC approved both the exchange’s listing standards in January 2013 and the Center does not expect the changes to have a major impact on most large companies, which already had compensation committees meeting the standards.