Details

Autor(en) / Beteiligte

• Avakian, Stephanie
• Brown, Lillian
• Cahn, Mark D
• Cross, Meredith B
• Murray, Suzanne
• Wilson, Alan J
• Hawkins, Eric L

Titel

SEC Update

Ist Teil von

• The Investment Lawyer, 2022-03, Vol.29 (3), p.33-37

Ort / Verlag

Englewood Cliffs: Aspen Publishers, Inc

Erscheinungsjahr

2022

Quelle

Access via Business Source (EBSCOhost)

Beschreibungen/Notizen

• REGULATORY MONITOR SEC Proposes Rules to Modernize Share Repurchase Disclosures On December 15, 2021, the same day it proposed amendments to Rule 10b5-1 under the Securities Exchange Act of 1934 (Exchange Act) that may blunt the use of the affirmative defense for insider trading,1 the Securities and Exchange Commission (SEC) also proposed new disclosure rules concerning share repurchases, or buybacks, which have long attracted critical political and media attention. Critics of buybacks have raised concerns that management may conduct buybacks for insider benefits, such as for purposes of earnings management (that is, through decreasing the denominator for earnings per share (EPS) calculations), to satisfy short-term earnings objectives or to effect short-term upward price pressure to maximize share price or EPS-tied executive compensation arrangements. Information to be disclosed on the new Form SR includes: * Class of securities purchased; * Total number of shares (or units) purchased, including all company repurchases whether or not made pursuant to publicly announced plans or programs; * Average price paid per share (or unit); * Aggregate total number of shares (or units) purchased on the open market; * Aggregate total number of shares (or units) purchased in reliance on the safe harbor in Rule 10b-18;3 and * Aggregate total number of shares (or units) purchased pursuant to a plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Consistent with the concerns described above regarding potential managerial self-interest, the proposed rules also would require companies to check a box above the Regulation S-K Item 703 share repurchase table indicating whether any of the company's Section 16 officers or directors purchased or sold shares or other units of the class of the company's equity securities that is the subject of a company share repurchase plan or program within 10 business days before or after the announcement of such plan or program.