On December 7th, the SEC reopened the comment period on proposed amendments aimed at updating and enhancing the disclosures required for an issuer to repurchase or buyback its equity securities. The amendments to the proposed rules for
share repurchase disclosure were initially proposed by the SEC in December 2021, and the comment period for the proposal was originally reopened in October 2022.
The law requires certain corporations to pay a non-deductible excise tax equaling one percent of the fair market value of any stock of the corporation repurchased by that corporation during the taxable year. Accordingly, the SEC’s Division of Economic and Risk Analysis has prepared a memorandum to address economic repercussions that might result from the new excise tax.
The proposed amendments, which were designed to enhance the quality, relevance, and timeliness of data related to issuer share repurchases, would also revise and improve disclosure conditions for repurchases of an issuer’s equity securities by:
- requiring daily repurchase disclosure on a new Form SR furnished to the SEC one business day after execution of an issuer’s share repurchase order
- requiring information disclosed under Item 703, Item 16E of Form 20-F, Item 9 of Form N-CSR, and new Form SR be reported using the structured data language, Inline eXtensible Business Reporting Language
- amending Item 703 of Regulation S-K with corresponding changes to Item 16E of Form 20-F for foreign private issuers and Item 9 of Form N-CSR for certain registered closed end investment management companies, to require additional detail regarding the structure of an issuer’s repurchase program and its share repurchases
Interested parties may submit feedback during the reopened comment period, which will remain open for 30 days after publication in the Federal Register. For details on ways to respond, refer to the Share Repurchase Disclosure Proposed Rule on the SEC’s website.
Source:
SEC Reopens Comment Period for Proposed Rule on Share Repurchase Disclosure Modernization (sec.gov)
Proposed Rule (sec.gov)
