On May 3, 2023, the SEC adopted amendments that will require public companies to provide new and expanded share repurchase disclosures. In a significant departure from the current regulatory framework, the amendments will require foreign private issuers (FPIs) to file quarterly SEC disclosures.

Calendar year-end US domestic companies must first provide the new disclosures in their Form 10-Ks filed in 2024. FPIs will generally be required to make the new quarterly disclosures starting mid-August 2024.

US domestic companies must provide:

  • Quarterly disclosure of daily repurchase activity. Companies must, on a quarterly basis in an exhibit to their Form 10-Ks and 10-Qs, provide tabular quantitative disclosure of daily repurchase activity, including:
    • the average price paid per share;
    • the total number of shares purchased (including the number of shares purchased as part of a publicly announced plan or on the open market); and
    • the maximum number of shares that may yet be purchased under a publicly announced plan.

This new requirement replaces the existing quarterly disclosure requirement relating to share repurchases aggregated on a monthly basis.

  • Quarterly disclosure relating to repurchase programs. In their Form 10-K and 10-Q filings, companies must:
    • check a box to indicate whether directors or Section 16 officers purchased or sold shares that are the subject of a publicly announced repurchase program within four business days before or after the program was announced or increased; and
    • provide narrative disclosure about the objectives or rationales for their share repurchases, the process or criteria used to determine the amount of the repurchases, and any policies or procedures relating to purchases and sales by their officers and directors during a repurchase program.
  • Additional disclosures relating to Rule 10b5-1 trading plans. Quarterly disclosure will be required in Form 10-Ks and 10-Qs about the adoption, termination, and the material terms of companies’ Rule 10b5-1 trading plans (excluding pricing information). This includes disclosure whether the repurchases were intended to make use of the Rule 10b-18 safe harbor or the Rule 10b5-1 affirmative defense.

Compliance dates:

  • The new quarterly tabular and narrative disclosure for US domestic companies starts with the first Form 10-K or 10-Q that covers the first full fiscal quarter beginning on or after October 1, 2023. This means that a calendar year-end company’s 2023 10-K (filed in 2024) must include the new disclosure covering the fourth quarter of 2023.

All FPIs must provide:

  • Newly required quarterly filings on Form F-SR. Up until now, FPIs had no specific quarterly SEC filing obligations. In a significant departure from this long-standing approach, FPIs must file quarterly new Form F-SR providing:
    • tabular disclosure of daily repurchase activity comparable to that provided by US domestic companies; and
    • checkbox disclosure indicating whether directors or senior management purchased or sold shares that are the subject of a publicly announced repurchase program within four business days before or after the program was announced or increased.

FPIs other than Canadian MJDS filers must provide:

  • Annual disclosure relating to repurchase programs. FPIs must provide annual narrative disclosure about the objectives or rationales for their share repurchases, the process or criteria used to determine the amount of the repurchases, and any policies or procedures relating to purchases and sales by their directors or senior management during a repurchase program.

Compliance dates:

  • FPIs must start filing new Form F-SR within 45 days after the end of the first full fiscal quarter that begins on or after April 1, 2024, i.e., by August 14, 2024. FPIs that are not Canadian MJDS filers will be required to provide the Form 20-F narrative disclosure in the first 20-F after the first Form F-SR has been filed. For calendar year-end FPIs, this would mean the 20-F for the year ended December 31, 2024 (filed in 2025).

For all companies:

  • The affirmative defense of Rule 10b5-1(c) for public companies remains unchanged. Contrary to speculation when the SEC adopted amendments to Rule 10b5-1, the SEC did not change the conditions that a company’s trading plan must satisfy to benefit from Rule 10b5-1(c)’s affirmative defense (e.g., by imposing a cooling-off period or the limitation on overlapping trading plans that now applies to officer and director plans).
  • Disclosures must be tagged using Inline XBRL, including FPI disclosures on Form F-SR.