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SEC Proposes New Share Repurchase Disclosure Rules

Required to be compiled in tabular format, the disclosures had to include:

  • The total number of shares or units purchased by the issuer – and a footnote disclosure on the nature of the transaction.
  • The average price paid per share or unit.
  • The total number of shares or units purchased as part of a publicly announced repurchase plan or program.
  • The maximum number or approximate dollar value of shares or units may yet be purchased under the plans or programs.

In a move to advance with time and the current economic scenario, the SEC seeks to enhance the transparency of the disclosures by mandating a more detailed and frequent disclosure.

New Share Repurchase Disclosure Rules by SEC

What has changed?

New Form SR now requires next-day reporting.

The proposed upgrade in rules now requires an issuer to disclose any purchase made by or on behalf of the issuers or an affiliated purchaser of shares or units of any class of the issuer’s equity securities registered under Section 12 of the Exchange Act.

The issuer would be required to file a new Form SR by the end of the first business day following the day the issuer executes the share repurchase. The proposed new Form SR will need data to be structured in tabular format according to Inline XBRL. The following data will be captured:

  • Date of the repurchase.
  • Identification of the class of securities purchased.
  • The total number of shares or units purchased (
  • The average price paid per share or unit.
  • The aggregate total number of shares or units purchased on the open market.
  • The aggregate total number of shares or units purchased in reliance on the safe harbor in Exchange Act Rule 10b-18.
  • The aggregate total number of shares purchased pursuant to a plan intended to satisfy the defense conditions of Exchange Act Rule 10b5-1(c).

Enhanced disclosures on Form 10-K, Form 10-Q, Form 20-F, and Form N-CSR

These new rules proposed by the SEC is also likely to have an impact on the periodic disclosure of repurchases required on Form 10-K, Form 10-Q, Form 20-F, and Form N-CSR. Using structured data through Inline XBRL, the issuer would be required to disclose the following information:

  • The objective or rationale for its share repurchases and process or criteria used to determine the amount of repurchases.
  • Any policies or procedures relating to purchases and sales of the issuer’s securities by its officers and directors during a repurchase program, including any restriction on such transactions.
  • Whether repurchases were made pursuant to a plan intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c), and if so, the date the plan was adopted or terminated.
  • Whether repurchases were made based on the Exchange Act Rule 10b-18 non-exclusive safe harbor.

What Should You Do Now?

These rules may only be a proposal, but they need your attention now so steps can be taken to prepare for mandates when introduced. Some generic things that you should consider are: 

  • Would you want to submit a comment letter to the SEC?
  • Should you review your disclosure protocols to ensure that you are able to comply with the new Form SR filing requirements on time?
  • Do your procedures regarding Exchange Act Rule 10b5-1 need a review? 
  • Do you need to put restrictions on officers and directors selling shares while your company is in the market repurchasing securities? What could impact both issuer repurchase programs and sales by officers and directors?

While these rules are still in a proposal phase, they are subject to a 45-day comment period. What do you think about these new proposed rules? We’d love to hear from you! Get touch with an XBRL Expert from our team and share your thoughts.