The Securities and Exchange Commission (SEC) has proposed amendments to its rules related to disclosure of share repurchases, also known as stock buybacks.
The proposed rules would require an issuer to submit a new Form SR before the end of the first business day after the issuer executes a share repurchase. The form would require disclosure identifying the class of securities purchased, the total amount purchased, the average price paid, and the total amount purchased.
“Share buybacks have become a significant component of how public issuers return capital to shareholders,” SEC Chair Gary Gensler said. “I think we can lessen the information asymmetries between issuers and investors through enhanced timeliness and granularity of disclosures that today’s proposal would provide.”
The proposed amendments also would enhance disclosure requirements regarding repurchases of an issuer’s equity securities. Specifically, an issuer would be required to disclose: the objective or rationale for the share repurchases and the process or criteria used to determine the repurchase amounts; any policies and 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; and whether the issuer is making its repurchases pursuant to a plan that it intends to satisfy the conditions of the Exchange Act Rule.
The proposed rule changes will be published on SEC.gov and in the Federal Register. The comment period will remain open for 45 days after publication in the Federal Register.