SEC Proposes New Share Repurchase Disclosures

January 2022


 

Background

Share repurchases made by or on behalf of the company or an affiliate purchaser are required to be disclosed within the issuer’s periodic report. Item 703 of Regulation S-K requires tabular disclosure of issuer purchases of equity securities by month, including the number of shares repurchased and average price paid per share, as well as information about the repurchase plan or program. As cited in the proposal, this disclosure does not include the specific date of the repurchase. As the disclosure is required in an issuer’s periodic reports, investors may be unaware of the repurchase for months. The proposed rules are intended to benefit investors by improving “the quality, relevance, and timeliness of information related to issuer share repurchases.”
 

Summary

The proposed rules would require an issuer to report any share repurchase on Form SR, which is to be furnished no later than the end of the first business day following the repurchase. The form would require tabular disclosure, similar that required under Item 703 of Regulation S-K, however additional information would be included, such as the specific date of sale as well as whether the share repurchases were made pursuant to the Rule 10b-18 safe harbor, or Rule 10-b5-1. The SEC also proposed enhanced disclosure requirements under Item 703 of Regulation S-K to include similar detail, as well as information about the objective and process of the share repurchase program, and any policies and procedures in place for officers and directors during the program.
 
Under the proposed rules, the information disclosed within Form SR and under the enhanced disclosures within Item 703 of Regulation S-K would be required to be tagged using Inline XBRL.
 
Comments on the proposal are due 45 days after publication to the Federal Register.