April 27, 2023

Share Repurchase Disclosure—On SEC’s Agenda for Next Wednesday!

We realize the SEC’s Reg Flex Agenda is—as its title suggests—flexible. Still, we’ve been anxiously awaiting upcoming open meetings over here given the number of highly-anticipated rulemaking topics teed up for spring 2023 in the latest Reg Flex Agenda. Yesterday the SEC announced an open meeting scheduled for next Wednesday, and one of the items the Commission will consider is share repurchase disclosure.

The SEC’s proposal for issuer repurchases dates back to December 2021. Under the proposed repurchase rules, the SEC would: (i) require daily repurchase disclosure on a new Form SR, which would be furnished to the SEC one business day after execution of a company’s share repurchase order; (ii) amend Item 703 of Regulation S-K to require additional detail regarding the structure of a company’s repurchase program and its share repurchases; and (iii) require information disclosed pursuant to Item 703 of Regulation S-K and pursuant to Form SR to be reported using Inline XBRL.

As a reminder of the history here, at that same December 2021 meeting, the SEC also proposed amendments to Rule 10b5-1. Subsequently, the SEC reopened the comment period on the share repurchase proposal—twice—and then, in December 2022, adopted the Rule 10b5-1 amendments without acting on the share repurchase proposal. Further, in the final Rule 10b5-1 amendments, the SEC did not address Rule 10b5-1 plans for issuer share repurchase programs and refrained from adopting a cooling-off period for issuers, noting that the need for regulatory action regarding issuer use of Rule 10b5-1 plans, such as in the share repurchase context, was still under consideration.

Meredith Ervine