Summary of the vacated rule
The SEC issued a Fact Sheet summarizing the key provisions of the final rules, which are the subject of the Court rulings discussed above.
The amendments would have required tabular disclosure of an issuer’s repurchase activity aggregated on a daily basis and disclosed either quarterly or semi-annually, depending on filer type.
The table required, for each day:
- class of shares
- average price paid per share
- number of shares purchased, including number of shares purchased pursuant to a publicly announced plan or on the open market
- number of shares purchased that are intended to qualify for the safe harbor in Rule 10b-18
- number of shares purchased under a plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).
The final rules required issuers that file on domestic forms to file on a quarterly basis the daily repurchase data in an exhibit to their Form 10-Q and Form 10-K (for the fourth fiscal quarter). Listed Closed-End Funds were to include the data in their annual and semi-annual reports on Form N-CSR. FPIs reporting on FPI forms were to disclose the data in a new Form F-SR, to be filed within 45 days after the end of an FPI’s fiscal quarter.
Issuers were also required to include a checkbox preceding their tabular disclosures indicating whether certain officers and directors 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.
The final amendments were to revise Item 703 of Regulation S-K (with corresponding changes to Form 20-F and Form N-CSR) by:
- eliminating disclosure of monthly repurchase data in periodic reporting; and
- enhancing and expanding disclosure requirements related to an issuer’s share repurchases in its periodic filings (e.g. Forms 10-K and 10-Q, Form 20-F and N-CSR).
Specifically, the following narrative disclosures were to be required in an issuer’s periodic filings:
- The objective or rationale for the issuer’s share repurchases and process or criteria used to determine the amount of repurchases.
- 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 restriction on such transactions.
Issuers filing on Forms 10-K and 10-Q were also to be required to disclose whether any Rule 10b5-1 trading arrangements were adopted or terminated and the material terms of such 10b5-1 trading arrangements.
All disclosures were to be tagged using Inline XBRL, including those in new Form F-SR.