SEC Imposes 10-Year Term Limit for Exchange Broker Directors to Enhance Governance

The Securities and Exchange Commission (SEC) has approved a new rule capping the term of directors of exchange brokers at 10 years, aiming to strengthen corporate governance and prevent entrenchment. The policy, effective immediately, applies to all exchange brokers registered with the SEC and is intended to promote board independence and regular refreshment. Under the rule, directors serving more than a decade will be required to step down unless granted a special exemption. The SEC said the move aligns with international best practices and responds to concerns about long-serving directors potentially compromising oversight. Market participants have largely welcomed the change, citing improved accountability and fresh perspectives on boards.