On April 26, 2023, the U.S. Securities and Exchange Commission (SEC) published a notice of an open meeting to be held next Wednesday, May 3, 2023, to consider whether to adopt rules requiring additional disclosures relating to issuers’ equity share repurchases.

The SEC proposed the share repurchase disclosure rules back in December 2021. The proposed rules would require next-business day reporting on a Form SR of issuer repurchases, as well as enhanced periodic disclosures of the structure of an issuer’s repurchase program and its repurchases. The proposed rules are discussed in further detail in our previous Client Alert.

We look forward to seeing whether and how the final rules differ from the proposed rules, in particular, in response to the public comments received during the three public comment periods. The initial public comment period closed in April 2022, but was reopened in October 2022 because of a technological error that caused some public comments submitted through the SEC’s internet comment form not to have been received by the SEC. Wilson Sonsini submitted a comment letter on this proposal during the initial public comment period.

In addition, in August 2022, the “Inflation Reduction Act” (the Act) was signed into law by President Biden, which, among other things, included a new one-percent excise tax on stock repurchases. For more information on the Act, please see our previous Client Alert. Following the enactment of the Act, in December 2022, the staff of the SEC’s Division of Economic and Risk Analysis prepared a memorandum providing a Supplemental Analysis of the Potential Implications of the Recently Enacted Excise Tax on Share Repurchases for the Economic Effects of Share Repurchase Disclosure Modernization Amendments. This staff memorandum was added to the public comment file for the share repurchase disclosure rules, and the SEC reopened the public comment period through January 11, 2023, in order to provide an opportunity for interested persons to review and comment on this supplemental analysis.