SEC Adopts Final Rules Regarding Share Repurchases and Related Disclosures
On May 3, 2023, the Securities and Exchange Commission adopted final rules regarding public company issuers' share repurchases and Rule 10b5-1 trading plans. Although the final rules are not as burdensome as the proposed rules, the final rules will nevertheless significantly heighten issuers' disclosure obligations.
On a quarterly basis, an issuer must disclose: quantitative information about its own daily share repurchase activity; whether its directors and officers bought or sold shares within four business days of the issuer's announcement of a new, or an increase to an existing, share repurchase program; and for domestic issuers, the adoption or termination of Rule 10b5-1 plans and the material terms of such plans.
The final rules also require an issuer to provide enhanced disclosure of its repurchase programs and practices generally, including policies and procedures relating to share trading by directors and officers (or senior management for foreign private issuers) during the life of a repurchase program.
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