April 25, 2022

Comment Pushback: Share Repurchase Disclosure Proposal

With the comment period now over for the SEC’s proposed amendments to require real-time disclosure about share repurchases, we can now get a sense of how much pushback that controversial proposal has received. A recent Law360 article notes that several business groups, including the U.S. Chamber of Commerce, Business Roundtable and National Association of Manufacturers, have submitted comments indicating that the SEC’s proposal for a one-day disclosure will burden companies and amount to information overload for investors. Many industry groups and law firms urged the SEC to consider mandating disclosure monthly rather than daily and require some minimal thresholds regarding the size of the company and size of the repurchase before it needs to be reported. On the other hand, the article notes:

Wall Street watchdog groups see it differently. The nonprofit organization Better Markets lauded the SEC for seeking quicker disclosure, which it considers an overdue fix from a “molasses-like quarterly timetable,” noting the volume of buybacks and speed at which information flows nowadays.

At this point, we do not have any indication of when final rules will be considered by the Commission, but it is possible that final rules could be adopted as early as this summer.

– Dave Lynn