On May 3, 2023, the Securities and Exchange Commission (the “SEC”) adopted new rules and related amendments regarding disclosure of share repurchase programs by corporate issuers and their affiliated purchasers. These additional disclosure requirements represent the SEC’s latest efforts to provide investors with more detailed information to assess the purposes and effects of share repurchases (also known as buybacks).

As summarized below, the new disclosure requirements will require more detailed disclosure about the structure and purpose of an issuer’s repurchase programs and share repurchases.¹

Disclosure of Share Repurchases

• The SEC adopted a new Item 601(b)(26) to Regulation S-K, to be filed as an exhibit to Form 10-K or Form 10-Q, requiring domestic reporting companies to provide quarterly tabular disclosure of share repurchases made for each day of the quarter. The new exhibit requires the following information for each day on which share repurchases occurred:
  • The execution date;
  • The class of shares;
  • The total number of shares purchased;
  • The average price paid per share;
  • The total number of shares purchased as part of a publicly announced program;
  • The aggregate maximum number of shares (or approximate dollar value) remaining to be purchased under a publicly announced program;
  • The total number of shares purchased on the open market;
  • The total number of shares purchased that are intended to qualify for the Rule 10b-18 safe harbor; and
  • The total number of shares purchased pursuant to a 10b5-1 trading plan
  • Previously, issuers were only required to provide quarterly disclosure of their aggregated share repurchases on a monthly basis. Additionally, there was no requirement to disclose the amount of shares purchased (i) on the open market, (ii) that are intended to qualify for the Rule 10b-18 safe harbor or (ii) pursuant to a 10b5-1 trading plan. In connection with the adoption of the daily disclosure requirement under Regulation S-K Item 601(b)(26), the SEC eliminated the requirement to provide the aggregated monthly disclosure under Regulation S-K Item 703.
  • Notably, the SEC had initially proposed requiring this tabular disclosure to be made within one business day of the execution of each share repurchase. This was widely opposed by numerous commenters, and the SEC revised the rule to require quarterly disclosure.

• Foreign Private Issuers, or FPIs, that have not elected to file periodic reports on domestic forms will be required to disclose their daily share repurchase data quarterly on a new Form F-SR within 45 days of the end of each fiscal quarter.
• Issuers must also include a checkbox above the tabular disclosure that indicates whether any Section 16 officers or company directors purchased or sold securities within four business days before or after the company’s announcement of a publicly announced repurchase plan or increase of an existing plan.
• The final rules and amendments clarify that this tabular disclosure exhibit will be treated as “filed” rather than “furnished”, meaning this disclosure will be subject to Section 18 liability and will be incorporated by reference into the company’s filings under the Securities Act of 1933, as amended.

Expanded Narrative Disclosure

• The SEC amended Item 703 of Regulation S-K to require additional narrative disclosures around an issuer’s share repurchase plans or programs. As amended, issuers must disclose the following information in narrative form for the period covered by the tabular disclosure:
  • for publicly announced repurchase plans or programs, the objectives or rationales for each plan or program and the process or criteria used to determine the amount of repurchases;
  • the following information about publicly announced repurchase plans or programs, which is currently required as a footnote to the monthly repurchase table under Item 703:
  • the date each plan or program was announced;
  • the dollar or share amount approved under each plan or program;
  • the expiration date (if any) of each plan or program;
  • each plan or program that expired; and
  • each plan or program the issuer has determined to terminate prior to expiration or under which the issuer does not intend to make further repurchases;
  • the number of shares purchased outside of a publicly announced plan or program, and the nature of any such transactions; and
  • any policies and procedures relating to purchases and sales by the issuer’s officers and directors during a repurchase plan or program, including any restrictions on such transactions.

New 10b5-1 Trading Plan Disclosure for Issuers

• The SEC adopted a new Item 408(d) to Regulation S-K requiring issuers to disclose whether they adopted or terminated any Rule 10b5-1 trading plans during each fiscal quarter, as well as a description of the material terms of each such plan, including (i) the date of adoption or termination, (ii) the duration of the plan and (iii) the aggregate number of securities to be purchased or sold under the plan.
  • to the extent the information required by Item 408(d) is already disclosed in the narrative form of Item 703, a cross-reference to that disclosure would satisfy the requirements of Item 408(d)
• This new Item 408(d) substantially mirrors the recently adopted Item 408(a), which requires substantially the same disclosure with respect to 10b5-1 trading plans adopted or terminated by directors and officers of an issuer.

The new rules and amendments will become effective 60 days after publishing in Federal Register. FPIs must comply with the new requirement to file a Form F-SR beginning with the first fiscal quarter that begins on or after April 1, 2024. All other issuers must comply with the new requirements in their Exchange Act reports on Forms 10-Q and 10-K beginning with the first filing covering the first fiscal quarter beginning on or after October 1, 2023, meaning most domestic issuers will first be required to provide these new disclosures regarding the fourth quarter of 2023 in their Form 10-K for the 2023 fiscal year.

[1] The final rules and amendments require that all responsive disclosure must be provided using Inline XBRL.