On November 22, 2023, the SEC issued an order postponing the effective date of rules that would require issuers to include detailed disclosures in periodic reports related to their share repurchases (the “Repurchase Rule”). For a summary of the Repurchase Rules, including Regulation S-K Items 408(d) and 703, see our Securities Snapshot: 3^rd Quarter 2023 – Share Repurchase Rule Reminders. The SEC’s order follows an opinion from the Fifth Circuit of the U.S. Court of Appeals granting review of a challenge to the Repurchase Rule and remanding to the SEC “to correct the defects” by November 30, 2023. In October 2023, the Fifth Circuit held the rulemaking leading to the SEC’s adoption of the Repurchase Rule was arbitrary and capricious. In connection with postponing the Repurchase Rule pending further SEC action, the SEC filed a motion with the Court to extend the time for the SEC to take the required corrective action. The Court denied the SEC’s request for an extension, leaving the SEC with a November 30, 2023 deadline to correct the defects.

Given the timing of the court’s decision and the SEC’s impending deadline, we expect that the Repurchase Rule will remain stayed pending additional guidance.