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Fifth Circuit Vacates SEC Share Repurchase Disclosure Rule
December 26, 2023 Download PDF
On December 19, 2023, the U.S. Court of Appeals for the Fifth Circuit vacated the SEC’s share repurchase disclosure rule, which would have required public companies to disclose their reasons for repurchasing shares, and to collect daily repurchase data and file it quarterly. The Fifth Circuit had previously held that the SEC’s adoption of the rule violated the Administrative Procedure Act, and had remanded the matter to the SEC and directed it to correct the noted deficiencies within 30 days. The SEC initially asked for more time, and after that request was denied, advised the court that it was unable to address the deficiencies within the 30-day time period. As a result, issuers will not be required to comply with the rule’s required disclosures in their upcoming reports – this includes not just share repurchase disclosures, but also disclosures about entry by issuers into Rule 10b5-1 plans, and disclosures regarding trading by directors and executive officers within four business days of a share repurchase announcement.
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