TheCorporateCounsel.net

In adopting the final amendments to the share repurchase disclosure requirements, the SEC did not let the fact that foreign private issuers do not file quarterly reports stand in the way of quarterly reporting of daily share repurchase data. In a distinct departure from the historical approach to Exchange Act reporting by foreign private issuers, the SEC adopted new Form F-SR, which will require the disclosure of repurchase information within 45 days after the end of a foreign private issuer’s fiscal quarter. The move prompted Commissioner Mark Uyeda to note in his statement:

However, in the future, these amendments may be remembered as the beginning of the end for the Commission’s approach to foreign private issuers (“FPIs”). For more than 55 years, the Commission has allowed FPIs to satisfy their Exchange Act reporting requirements by (1) filing an annual report with information comparable to disclosure provided by domestic companies and (2) furnishing a Form 6-K for any material information disclosed by the FPI under its home country laws, reported pursuant to stock exchange requirements, or provided to its shareholders. Today’s amendments will require FPIs to make quarterly filings to report share repurchases regardless of their home country’s disclosure requirements. This change fundamentally upends the Commission’s long-standing and bipartisan approach of largely deferring to the disclosures made by FPIs pursuant to their home country reporting requirements. Given the significance of this shift in regulatory philosophy, the Commission should have undertaken a separate rulemaking on the issue, instead of including this change as part of a rulemaking focused on share repurchase disclosure.

Foreign private issuers that file on the foreign private issuer forms (e.g., Form 20-F) will be required to comply with the new disclosure and tagging requirements in new Form F-SR beginning with the Form F-SR that covers the first full fiscal quarter that begins on or after April 1, 2024. The Form 20-F narrative disclosure that relates to the Form F-SR filings, which is required by Item 16E of Form 20-F, and the related tagging requirements will be required starting in the first Form 20-F filed after their first Form F-SR has been filed.

– Dave Lynn