SEC Adopts Share Repurchase Disclosure Rules

By Alan J. Wilson, WilmerHale

On May 3, 2023, the Securities and Exchange Commission (SEC) adopted amendments to significantly increase the disclosure required about issuer repurchases of their equity securities that are registered under the Securities Exchange Act of 1934. The amendments establish new disclosure requirements related to the structure of issuer repurchase programs and share repurchases, and they require quarterly disclosure of certain quantitative daily repurchase data. In a departure from the SEC’s original rule proposal, next-business-day reporting of share repurchases is not required under the final rules. For foreign private issuers, though, these latest amendments usher in a new quarterly reporting obligation. The amendments also revise and expand the existing periodic disclosure requirements about repurchase programs, and add new quarterly disclosure in certain periodic reports related to an issuer’s adoption and termination of Rule 10b5-1 trading arrangements.

Issuers will be required to comply with the new disclosure (including Inline XBRL tagging) requirements in their Exchange Act periodic reports on Forms 10-Q and 10-K beginning with the first filing that covers the first full fiscal quarter that begins on or after October 1, 2023 (i.e., beginning with the 10-K for the year ending December 31, 2023, for a calendar year filer). Foreign private issuers that file forms specific to that status will be required to comply with the new disclosure and tagging requirements in new Form F-SR that covers the first full fiscal quarter that begins on or after April 1, 2024. The Form 20-F narrative disclosure 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.

SEC Adopts Amendments to Enhance Private Fund Reporting

By Alan J. Wilson, WilmerHale

On May 3, 2023, the SEC adopted amendments to Form PF. In an effort designed to enhance the ability of the Financial Stability Oversight Council (FSOC) to assess systemic risk and bolster the SEC’s oversight of private fund advisors, the amendments will require large hedge fund advisers and all private equity fund advisers to file current reports upon the occurrence of certain reporting events that could indicate significant stress at a fund or a potential for investor harm.

Large hedge fund advisers (i.e., those with at least $1.5 billion in hedge fund assets under management) and all private equity fund advisers will be required to file current reports upon the occurrence of certain events that could indicate significant stress at a fund or investor harm. For large hedge fund advisers, reporting within seventy-two hours of the occurrence of any of the following events is required: extraordinary investment losses, significant margin and default events, terminations or material restrictions of prime broker relationships, operations events, and events associated with withdrawals and redemptions. Private equity fund advisers must file reports on the following events within sixty days of each fiscal quarter end: removal of a general partner, certain fund termination events, and the occurrence of an adviser-led secondary transaction.

The amendments concerning current reporting will become effective six months after publication of the adopting release in the Federal Register, with the balance of the amendments becoming effective one year after publication in the Federal Register.

SEC Adds Three New Rule 10b5-1 C&DIs

By Alan J. Wilson, WilmerHale

On May 25, 2023, the SEC Division of Corporation Finance posted three new Exchange Act Rule Compliance and Disclosure Interpretations concerning Rule 10b5-1 (see C&DIs 120.26-.28). The new C&DIs provide guidance in regards to:

  • When companies are required to begin providing the quarterly Item 408(a) disclosures and the annual Item 402(x) and Item 408(b) disclosures (Item 16J of Form 20-F disclosures for foreign private issuers) in periodic reports;
  • when companies are required to begin providing the disclosures in proxy or information statements; and
  • when, in the context of two permissible overlapping plans, trading can begin under the later-commencing plan if the individual terminates an earlier commencing plan.

For more information on the recent amendments to Rule 10b5-1, see our prior post.

PCAOB Expands Audit Firm Inspection Reports, Updates Standard-Setting Agenda

By Thomas W. White, Retired Partner, WilmerHale

Consistent with objectives set forth in its current strategic plan (see our prior note), in May the Public Company Accounting Oversight Board announced initiatives in two areas:

  • Inspections—The Board announced that it will include additional information in its reports on its inspections of accounting firms registered with the Board. Most notably, these reports will now include a section discussing auditor independence violations identified in inspection reports. These include instances of noncompliance with PCAOB independence rules, as well as “potential noncompliance” with the Securities and Exchange Commission’s independence rules. The reports will also contain more information related to a firm’s fraud procedures and the identification and assessment of the risks of material misstatements in financial statements; more commentary for certain situations; and new graphs. According to Board Chair Erica Y. Williams, “These enhancements will provide relevant information that investors have asked for and support improvements in overall audit quality.”
  • Standard-Setting and Rulemaking—Continuing to advance what Chair Williams calls “one of the most ambitious standard-setting agendas in its history,” the Board staff released a revised agenda that identified two more projects that it anticipates Board action on in the next twelve months. The revised agenda now projects the following standard-setting activities:
    • Adoption of pending proposed standards: Proposed quality control and confirmation standards (2023); and proposed standard regarding general responsibilities of auditors (TBD pending analysis of comment letters)
    • Standard-setting proposals in 2023: Noncompliance with laws and regulations; going concern; interim attestation standards; audit procedures using technology-assisted data analysis; firm and engagement performance metrics; substantive analytical procedures
    • Other standard-setting projects (no target date): Fraud; interim ethics and independence standards; use of a service organization; interim financial information reviews; remaining “interim” standards

    The Board also announced four rulemaking projects. These relate to contributory liability for others’ violations; firm reporting and transparency; firm registration; and follow-on disciplinary proceedings. The Board projects proposals on each project in 2023.


Rani Doyle

Rani Doyle

Managing Editor, Securities Law


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