On May 3rd, the SEC adopted rule amendments that modernize and improve disclosure about repurchases of an issuer’s equity securities that are registered under the Securities Exchange Act of 1934. Prior to the rule’s adoption, and pursuant to Regulation S-K, corporate issuers were required to file domestic forms to disclose, on a quarterly basis, any purchase made by or on behalf of the issuer of shares that are registered under Section 12 of the Exchange Act aggregated on a monthly basis. The same disclosure was required annually for foreign private issuers (FPIs) and semiannually for listed closed-end funds that are exchange traded.
Under the newly adopted amendments, issuers are required to:
provide quarterly disclosure in an issuer’s periodic reports on Forms 10-K and 10-Q related to an issuer’s adoption and termination of 10b5-1 trading arrangements
provide narrative disclosure about the issuer’s repurchase programs and practices in its periodic reports
check a box indicating if certain directors or officers traded in the relevant securities within four business days before or after the public announcement of an issuer’s repurchase plan or program
disclose daily repurchase activity quarterly or semiannually
The share repurchase disclosure amendments will also:
expand the requirements for narrative disclosures of repurchases in Regulation S-K, Form 20-F, and Form N-CSR to require an issuer to disclose (1) any policies and procedures relating to purchases and sales of the issuer’s securities during a repurchase program by its officers and directors, including any restriction on such transactions, and (2) the objectives or rationales for its share repurchases and the process or criteria used to determine the amount of repurchases
eliminate the current requirements in Regulation S-K, Form 20-F, and Form N-CSR to disclose monthly repurchase data in periodic reports
add new Item 408(d) of Regulation S-K to require quarterly disclosure in periodic reports on Forms 10-Q and 10-K about an issuer’s adoption and termination of Rule 10b5-1 trading arrangements
require issuers to present the disclosure using a structured, machine-readable data language.
Foreign Private Issuers
FPIs that file on FPI forms will be required to comply with the amendments in new Form F-SR beginning with the Form F-SR that covers the first full fiscal quarter that begins on or after April 1, 2024. The Form 20-F narrative disclosure concerning Form F-SR filings will be required starting in the first Form 20-F filed after the FPI’s first Form F-SR filing.
Listed Closed-End Funds
Listed Closed-End Funds will be required to comply with the amendments beginning with the Form N-CSR that covers the first six-month period that begins on or after January 1, 2024. All other issuers will be required to comply with the Forms 10-Q and 10-K amendments (for their fourth fiscal quarter) beginning with the first filing that covers the first full fiscal quarter that begins on or after October 1, 2023.