February 24, 2022

Transcript: Rule 10b51- & Buybacks: Practical Impacts of SEC’s Proposals

We’ve posted the transcript for our recent webcast for members, “Rule 10b51- & Buybacks: Practical Impacts of SEC’s Proposals.” I was joined on this webcast by an all-star panel: Brian Breheny from Skadden, Ning Chiu from Davis Polk, Meredith Cross from WilmerHale LLP and Keir Gumbs from Broadridge Financial Solutions. We discussed the SEC’s December 2021 rule proposals in detail and addressed the practical implications of the proposed rules if they were adopted, including this nugget from Ning:

What’s key here is that many of us work with companies that already have processes and procedures in place to make sure that there is no abuse. Even for those companies, what is being proposed would require some big changes. So, if we stick with talking about the individual plans, as opposed to the corporate plans, to the extent that anybody that has a 14-day, 30-day, or even a separate quarter cooling-off period – we’re now talking about 120 days – under the proposal, any modification would be the end of the plan. Anything, probably even fixing a typo, as of right now, would end the plan. It doesn’t actually accommodate even de minimis changes. A modification would end the plan and you start a new plan. You start your new 120-day cooling off period. I have a couple key questions. One is on the prohibition on overlapping plans. What exactly is an overlapping plan when you’re covering the same securities? What does it really mean? The affirmative defense can’t just be adopted in good faith, but it must be operated in good faith. Those are some of the key things that we’re all trying to give advice on.

– Dave Lynn