Additionally, the rule would also require issuers to present the disclosure using a structured data language. More specifically, the SEC is proposing to require issuers to tag the disclosures in Inline XBRL in compliance with Rule 405 of Regulation S-T and the EDGAR Filer Manual.

Current Periodic Disclosure Requirements 

The disclosure requirements apply to open market and private transactions and are included in an issuer’s periodic reports. Under the existing rules, issuers must disclose:

1. the average price paid per share (or unit)
2. the maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
3. the total number of shares (or units) purchased by the issuer or any affiliated purchaser during the relevant period, reported on a monthly basis and by class
4. the total number of shares (or units) purchased as part of a publicly announced repurchase plan or program

The rules will also make necessary the following: (1) footnote disclosure of the principal terms of all publicly announced repurchase plans or programs; (2) the number of shares purchased other than through a publicly announced plan or program, and (3) the nature of the transaction.

Proposed Enhanced Periodic Disclosure Requirements

The SEC’s proposed modifications would require more thorough and regular disclosure concerning issuer share repurchases, introducing increased periodic transparency that would require an issuer to disclose:

• if a repurchase was made pursuant to a plan that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c), and if so, the date that the plan was adopted or terminated
• any policies and procedures concerning purchases and sales of the issuer’s securities by its officers and directors during a repurchase program, including any restriction on such transactions
• the objective or rationale for its share repurchases
• process or criteria used to determine the amount of repurchases
• if a repurchase was made in reliance on the Exchange Act Rule 10b-18 nonexclusive safe harbor

Proposed Required Use of Form SR

The rule modifications would require an issuer (including a foreign private issuer and certain registered closed-end funds) to report any purchase made by or on behalf of the issuer or any affiliated purchaser of shares pursuant to Exchange Act Section 12. The issuer will be required to provide a new Form SR before the end of the first business day following the day on which the issuer executes a share repurchase. Proposed Form SR would require the following disclosure: 

• the aggregate total number of shares (or units) purchased in reliance on the safe harbor in Exchange Act Rule 10b-18
• identification of the class of securities purchased
• the aggregate total number of shares (or units) purchased on the open market
• date of the repurchase
• the aggregate total number of shares (or units) purchased pursuant to a plan intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5- 1(c)
• the total number of shares (or units) purchased, including all issuer repurchases whether or not made pursuant to publicly announced plans or programs
• the average price paid per share (or unit)

Under the proposed rules, the issuer must check a box denoting whether any of the issuer’s officers or directors, subject to the reporting requirements pursuant to Exchange Act Section 16(a), purchased or sold shares or other units of the class of the issuer’s equity securities that is the subject of an issuer share repurchase plan or program within 10 business days prior to or after the announcement of that plan or program. 

Interested parties may submit comment regarding the proposed rule during the comment period, which will remain open for 45 days after publication in the Federal Register. For details on ways to respond, refer to the Share Repurchase Disclosure Modernization Proposed Rule at sec.gov.

The proposing release will be published in the Federal Register and the SEC’s website.

Sources:

SEC Proposes New Share Repurchase Disclosure Rules (sec.gov)

Proposed Rule (sec.gov)

Fact Sheet (sec.gov)