On October 31st, the US Court of Appeals for the Fifth Circuit issued an opinion in Chamber of Commerce USA v. SEC, No. 23-60255 (Fifth Circuit), in which petitioners challenge the Share Repurchase Disclosure Modernization rule (Repurchase Rule), which became effective on July 31, 2023. The court granted the petition for review and ordered the SEC to correct the defects the court identified in the Repurchase Rule by November 30, 2023. The Repurchase Rule has not been corrected, allowing the rule to be vacated by the courts.
The following Repurchase Rule timeline includes all that has transpired since its proposal in December 2021:
- December 15, 2021 – the Share Repurchase Disclosure Modernization is proposed with the comment period ending April 1, 2022
- October 7, 2022 – the SEC reopens the comment period for this proposal due to a technical error. This comment period ended on November 1, 2022
- December 7, 2022 – the SEC again reopens the comment period, which ended on January 11, 2023
- May 3, 2023 – the SEC adopts the proposed amendments to the rules
- October 31, 2023 – the United States Court of Appeals for the Fifth Circuit issues its ruling on Chamber of Commerce of the USA v. SEC, stating the SEC violated the Administrative Procedure Act when adopting amendments to its share repurchase disclosure rules. The Court gave the SEC until November 30, 2023 to correct defects
- November 22, 2023 – the SEC postpones the effective date of the Share Repurchase Disclosure Modernization rule under Section 705 of the Administrative Procedure Act which provides that an agency may postpone the effective date of action taken by it pending judicial review when it finds that justice so requires. This results in the rule being stayed until further action is taken by the SEC. The SEC files a motion with the court requesting an extension of the November 30 deadline to correct the defects
- November 26, 2023 – the Court denies the SEC’s request for an extension
- December 1, 2023 – the SEC informs the Court that it was unable to correct defects in the Share Repurchase Disclosure Modernization rule within 30 days of the Court’s ruling, giving the Court the ability to vacate the rule
Inquiries pertaining to this announcement may be directed to the Division of Corporation Finance at (202) 551-3100.
Source:
Announcement Regarding Share Repurchase Disclosure Modernization Rule (sec.gov)
