On December 19, 2023, the U.S. Court of Appeals for the Fifth Circuit vacated the Securities and Exchange Commission’s (SEC) share repurchase modernization rules. The court had previously ordered the SEC to correct certain defects in the rules by November 30. When the SEC was unable to meet this deadline, the petitioners asked the court to vacate the rule, and ultimately prevailed in yesterday’s ruling.

This decision means that public companies do not need to comply with the updated repurchase disclosure rules, which included tabular disclosure of daily stock repurchases and narrative disclosure about repurchase programs. Information about repurchases will still need to be disclosed under Part II, Item 5 of Form 10-K and Part II, Item 2 of Form 10-Q, as has been the case for many years.

It is possible that the SEC will appeal the Fifth Circuit’s decision.