On June 9, 2023, the Securities and Exchange Commission approved the clawback listing standards proposed by the New York Stock Exchange and The Nasdaq Stock Market, each as required by SEC Rule 10D-1. Listed companies have until December 1, 2023 to adopt and implement a compliant clawback policy. The policy must apply to any individual who served as an "executive officer" of the listed company. An individual will be an "executive officer" if he or she is the listed company's president, principal financial officer, principal accounting officer, any vice-president of the listed company or a subsidiary in charge of a principal business unit, division, or function, any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the listed company or a subsidiary.

Many mortgage real estate investment trusts ("REITs") are managed by an external manager that oversees the REIT's assets on the REIT's behalf. Under an external management structure, the REIT compensates the manager through a private equity style arrangement: a flat fee based on assets under management and an incentive fee based on the REIT's performance. The REIT's external manager often also issues performance-based equity awards to incentive and compensate its employees. The new clawback policy is required to apply to the REIT's executive officers, including its president, principal financial officer and principal accounting officer. However, the REIT's board of directors (together with any board appointed executive officers) perform the policy-making function for the REIT. That function is not typically designated to an external manager or its employees. As a result, any compensation paid under the management agreement or paid by the manager to its employees will be outside the scope covered by the new clawback policy requirement.

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