Final SEC Rule on Corporate Buybacks to Expand Reporting Requirements, Especially for FPIs

June 1, 2023

On May 3, 2023, the Securities and Exchange Commission adopted rules to require more detailed qualitative and quantitative disclosure from reporting issuers regarding their share repurchases.

While the final rules did not include some of the more onerous amendments that were initially proposed, such as daily reporting of share repurchases, the final rules will expand issuers’ reporting obligations and, for foreign private issuers, require the filing of a new quarterly form with detailed information regarding the prior quarter’s share repurchases.

Implementation of the rules will also require issuers to disclose purchases and sales by their directors and officers around the time of the public announcement of a repurchase plan or program, which could also require new internal control procedures for both domestic issuers and FPIs.

The rules were approved by the SEC on a 3-2 vote, with the two Republican commissioners dissenting.

This memorandum provides a brief summary of the new rules and concludes with some potential implications.