SEC Adopts Amendments to Modernize Share Repurchase Disclosure

Following a corresponding consultation in January 2022, the U.S. Securities and Exchange Commission, SEC, has published a press statement to inform that it has finalized the proposed amendments to the disclosure requirements of issuers, including foreign ones and closed-end funds, pertaining to repurchases of shares. To recall, the objective of the Commission was to increase issuer transparency, facilitate supervision of such, foster investor protection, and prevent market manipulation by
– requiring issuers to make additional disclosures about their repurchase plans and repurchases in the periodic financial statements (reasoning behind a repurchase and the determination of the number of shares, company policies and procedures relating to the plan, or an indication as to whether or not the repurchase is made under Securities Exchange Act Rule 10b5-1(c) (insider trading rule – affirmative action) to ensure that such purchase is not “on the basis of” material nonpublic information);
– requiring issuers to file new form SR with the Commission following a share repurchase which would include information that currently needs to be disclosed in the financial statements as well, that is information on the number of shares, aggregate value of all shares, average price, share class and other information.
In its now enclosed final rule, the SEC outlines the responses it has received to the consultation and the final provisions as they will be implemented in various regulations under the Securities Exchange Act of 1934, the Securities Act of 1933, and the Investment Company Act.
#### The key final requirements will be as follows:
(1) ALL issuers will have to collect and aggregate on a daily basis data about their repurchase activities which must then be presented in annual, semi-annual, or quarterly reports as follows: Closed-end funds must present the information in their semi-annual and annual reports, specifically on Form N-CSR. Other issuers must do so quarterly in Form 10-Q and annually in Form 10-K. Foreign private issuers will have to do so in new Form F-SR to be filed within 45 days following the close of a business year. All information has to be provided in tabular form as follows:
Figures to be disclosed by issuers alongside their semi-annual reports

Corresponding existing disclosure requirements in other Forms will be eliminated.
(2) All issuers must make narrative disclosures in their applicable forms about (as mainly quoted):
– The objectives or rationales for each repurchase plan;
– The process or criteria used to determine the amount of repurchases;
– The number of shares purchased (other than through a publicly announced plan) and the nature of the transaction (such as open-market transactions or tender offers);
– For publicly announced repurchase plans:
– The date the plan was announced.
– The dollar or share amount approved.
– The expiration date, if any, of the repurchase plan.
– Each plan that has expired during the period covered by the tabular disclosure.
– Each plan the issuer has determined to terminate prior to expiration or under which the issuer does not intend to make further purchases.
– Any policies and procedures relating to purchases and sales of the issuer’s securities by its officers and directors during a repurchase program (including any restrictions on such transactions).
Additionally, all issuers will have to tick a checkbox – if applicable – to indicate whether or not certain staff members „purchased or sold shares that are the subject of an issuer share repurchase plan or program within four business days before or after the announcement of that plan or program.“ Furthermore, all issuers will have to disclose in a footnote the adoption and termination dates of Rule 10b5-1 trading arrangements. And finally, all disclosures will have to be made using inline XBRL format.
——————–
As above summary only briefly describes the upcoming disclosure requirements, please refer to the original document for more detailed, comprehensive information.