MONTH-IN-BRIEF (Nov 2023)
SEC Stays Share Repurchase Final Rule
By Carlos E. Juarez, Mayer Brown LLP
On November 22, 2023, the Securities and Exchange Commission (SEC) announced that it issued an order to postpone the effective date of its final share repurchase disclosure rule (the “Share Repurchase Final Rule”). The Share Repurchase Final Rule, discussed further at this link, requires quantitative and qualitative disclosure of share repurchases on a quarterly or semi-annual basis, depending on the type of issuer. The Share Repurchase Final Rule also revised and expanded the existing periodic disclosure requirements for share repurchases.
The Commission’s actions are in response to the U.S. Court of Appeals for the Fifth Circuit’s opinion in Chamber of Com. of the USA v. SEC, in which the petitioners challenged the Share Repurchase Final Rule. The Fifth Circuit granted the petition for review, calling the adoption of the Share Repurchase Final Rule “arbitrary and capricious,” and compelled the Commission to correct the defects the court identified in the rule by November 30, 2023. On November 26, 2023, the Fifth Circuit denied the SEC’s request for an extension.