Matthew E. Kaplan, Benjamin R. Pederson, and Jonathan R. Tuttle are Partners at Debevoise & Plimpton LLP. This post is based on a memorandum by Mr. Kaplan, Mr. Pederson, Mr. Tuttle, Anna Moody, Ashley Yoon, and Mark Flinn. Related research from the Program on Corporate Governance includes Insider Trading Via the Corporation (discussed on the Forum here) by Jesse M. Fried.
Rulemaking Activity
An Active Rulemaking Period with Gary Gensler at the Helm of the SEC
Since taking office as the SEC Chair in April 2021, Gary Gensler’s SEC has been busy publishing rule proposals, targeting current hot-button areas such as issuer share repurchases, insider trading and cybersecurity as well as topics such as clawback rules and pay-versus-performance disclosure, which have been a part of the SEC agenda since the Dodd-Frank Act was enacted in 2010.
Proposed Rule on Share Repurchase Disclosures
On December 15, 2021, the SEC released a new proposed rule that would significantly expand required disclosure concerning an issuer’s repurchases of its equity securities listed on a U.S. stock exchange or otherwise registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). If adopted, the proposed rules would: (i) require daily repurchase disclosure on a new Form SR, furnished to the SEC one business day after execution of the issuer’s share repurchase order; (ii) require additional detail regarding the structure of an issuer’s repurchase program and its share repurchases to be disclosed in periodic reports by amending Item 703 of Regulation S-K (“Regulation S‑K”); and (iii) require information disclosed on Form SR or pursuant to Item 703 of Regulation S-K to be tagged with inline eXtensible Business Reporting Language (“Inline XBRL”). The full text of these proposed amendments is available here.