Effectiveness of Share Repurchase Disclosure Rule Postponed for Now

On November 22, 2023, the Securities and Exchange Commission (SEC) announced an order postponing the effective date of the Share Repurchase Disclosure Modernization rule indefinitely, pending further SEC action. The SEC’s order was in response to the Fifth Circuit’s October 31, 2023 decision remanding to the SEC the repurchase disclosure rule to correct, by November 30, 2023, the defects in the rule’s adoption identified by the court.

Also on November 22, 2023, the SEC filed a motion requesting additional time in order for the SEC’s staff to comply with the Fifth Circuit’s remand order, which would delay the court from taking any action to vacate the rule. The SEC’s motion was opposed by the U.S. Chamber of Commerce and was denied by the Fifth Circuit on November 26, 2023. As a result, if the SEC does not correct the defects by the original November 30 deadline, the Fifth Circuit could entertain a motion to vacate the rule in its entirety.

Until the SEC or the Fifth Circuit takes further action, issuers may rely on the SEC’s postponement order. Winston & Strawn’s Capital Markets & Securities Law Watch and lawyers advising our public company clients will continue to monitor developments with the case and will provide updates as they become available.