On November 22, 2023, the U.S. Securities and Exchange Commission (SEC) announced that it issued an order postponing the effective date of the share repurchase disclosure rule (Repurchase Rule).^[1] The Repurchase Rule was discussed in our previous client alert. As a result of the SEC’s order, the Repurchase Rule is stayed pending further SEC action. As a reminder, on October 31, 2023, a three-judge panel of the United States Court of Appeals for the Fifth Circuit found that the SEC acted arbitrarily and capriciously, in violation of the Administrative Procedure Act, in adopting the Repurchase Rule. Notably, the Fifth Circuit did not vacate the Repurchase Rule, but rather remanded it and directed the SEC to correct the defects in the Repurchase Rule within 30 days of the opinion (or November 30, 2023). For more information on this decision, please see our Known Trends blog post.

In addition, on November 22, 2023, the SEC filed a motion to extend the remand period. The motion informs the court that the SEC stayed the effectiveness of the Repurchase Rule, and, in addition, provides that if the court grants the extension, then the SEC will provide an update within 60 days on the status of its “efforts to remedy the rule’s defects.”^[2] It is currently unclear whether the SEC will act prior to February 9 or 14, 2024 (depending on the filer) or February 29, 2024, when Forms 10-Q and Forms 10-K, respectively, for the fiscal period ending December 31, 2023, the deadline for the periodic filings that would otherwise be required to include new share repurchase information.  We are continuing to monitor developments and will provide additional information from the SEC as it becomes available.

^[1] Share Repurchase Disclosure Modernization, 88 Fed. Reg. 36,002 (June 1, 2023).

^[2] Motion of Respondent Securities and Exchange Commission to Extend Remand Period, Chamber of Commerce of the United States et al v. SEC, No. 23-60255 (5th Cir. October 31, 2023), filed on November 22, 2023.