TheCorporateCounsel.net

Last Wednesday, holiday magic arrived early for securities lawyers, when the SEC officially stayed the repurchase disclosure rule that would call for detailed disclosures in upcoming Form 10-Ks. The Thanksgiving Eve announcement followed a court ruling last month in which the 5th Circuit held that the rulemaking was “arbitrary & capricious” and ordered the Commission to fix it by November 30th. The rule had been challenged by the US Chamber of Commerce and other business groups.

The Commission issued the stay on the same day that it filed a motion with the court. The motion states that since the remand, the SEC’s staff has worked diligently to ascertain the steps necessary to comply with the court’s remand order and has determined that doing so will require additional time. Accordingly, the motion is for the court to extend the period of the remand – without in the meantime the court vacating the rule. The SEC’s motion stated that if the court grants the requested extension, the SEC will provide an update to the court within 60 days on the status of the SEC’s efforts to remedy the rule’s defects.

The court hasn’t ruled on the motion, and the Chamber is opposed to the extension. While we await that ruling, it’s important to note that this order doesn’t vacate the rule – it merely stays the compliance date pending further SEC action. Stay tuned.

Update: Cooley’s Cydney Posner blogged this morning that the court denied the SEC’s order over the weekend. We may know the fate of the rule later this week…

– Liz Dunshee