On November 22, the Securities and Exchange Commission (SEC) stayed the recently enacted Share Repurchase Disclosure Modernization Rule (Repurchase Disclosure Rule) pursuant to section 705 of the Administrative Procedure Act and the U.S. Court of Appeals for the Firth Circuit’s (Fifth Circuit) October 31, 2023 opinion providing the SEC 30 days to correct defects in the Repurchase Disclosure Rule.  For an overview of the Fifth Circuit’s October 31 opinion, please refer to our earlier blog post: Fifth Circuit Requires SEC to Revisit Share Repurchase Disclosure Rules.

The stay order issued by the SEC delays the effective date of the Repurchase Disclosure Rule pending any further action by the SEC.  In connection with the stay order issued by the SEC, the SEC also filed a motion with the Fifth Circuit requesting an extension of expiration of the Fifth Circuit’s 30-day period granted to remediate the deficiencies identified in the Fifth Circuit’s opinion issued on October 31, 2023, which is scheduled to expire at the end of the day this Thursday, November 30 (the Scheduled Remand Period).

On November 26, the Fifth Circuit denied the SEC’s motion seeking to extend the Scheduled Remand Period.  As such, the future of the Repurchase Disclosure Rule remains highly uncertain, taking into account the limited remaining time that the SEC has to file a response attempting to remedy the defects identified in the earlier Fifth Circuit opinion.  At a minimum, it appears highly unlikely that the Repurchase Disclosure Rule will be in effect for upcoming Form 10-Ks to be filed by calendar-year end filers for the fiscal year ending December 31, 2023 (as had been contemplated by the Repurchase Disclosure Rule, when adopted).  We will provide additional information when it becomes available.

If you have any questions, please email the authors directly or, if applicable, contact your primary Bass, Berry & Sims relationship attorney.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Kevin Douglas Kevin Douglas

Kevin Douglas has deep experience representing public companies on corporate and securities laws related matters, including companies within the healthcare industry. Kevin’s public company practice focuses on corporate governance matters, securities laws compliance, mergers and acquisitions, corporate finance and shareholder activism. His representative…

Kevin Douglas has deep experience representing public companies on corporate and securities laws related matters, including companies within the healthcare industry. Kevin’s public company practice focuses on corporate governance matters, securities laws compliance, mergers and acquisitions, corporate finance and shareholder activism. His representative experience has ranged from providing SEC disclosure advice to the audit committee of a Fortune 100 company to representing an NYSE-listed company in connection with its $4.3 billion acquisition by another public company to representing another NYSE-listed company in connection with its issuance of $2.2 billion in senior notes. Kevin has also represented private companies in a wide variety of mergers and acquisition, corporate finance, and other corporate law matters.

Photo of Eric Knox Eric Knox

Working with both national and local companies in the REIT, healthcare, food and hospitality and entertainment sectors, Eric Knox routinely counsels public and private companies on a variety of corporate and securities issues.