The Securities and Exchange Commission (SEC) has adopted amendments that modernize the disclosure requirements for issuers' equity securities repurchases, according to a news release.
Issuers now must provide daily repurchase activity on a quarterly or semi-annual basis, the agency said. The amendments aim to increase transparency and integrity and to lessen information asymmetries inherent between issuers and investors in buybacks.
“In 2021 buybacks amounted to nearly $950 billion and reportedly reached more than $1.25 trillion in 2022,” SEC Chairman Gary Gensler said in a statement. “[These] amendments will increase the transparency and integrity of this significant means by which issuers transact in their own securities.
"Through these disclosures, investors will be able to better assess issuer buyback programs," Gensler added. "The disclosures will also help lessen some of the information asymmetries inherent between issuers and investors in buybacks. That’s good for investors, issuers, and the markets.”
These required disclosures include the number of shares repurchased and the average price paid for each day a repurchase was conducted. Issuers also must indicate whether certain officers and directors traded in the relevant securities around the announcement of the repurchase plan.
The amendments will expand narrative repurchase disclosure requirements to include the objectives or rationales for share repurchases, the process used to determine the amount of repurchases, and policies and procedures relating to purchases and sales of the issuer's securities during a repurchase program by its officers and directors.
Foreign private issuers that file on foreign private issuer forms will disclose the quantitative data in new Form F-SR, starting with the first full fiscal quarter that begins on or after April 1, 2024.
Registered closed-end management investment companies, that are exchange-traded, will disclose the quantitative data and provide the narrative disclosure on Form N-CSR, starting with the first six-month period that begins on or after Jan. 1, 2024.
All other issuers will be required to include the quantitative data as an exhibit to their Forms 10-Q and 10-K and provide the narrative disclosure in their Forms 10-Q and 10-K, starting with the first filing that covers the first full fiscal quarter that begins on or after Oct. 1, 2023.
