On December 19, 2023, the Fifth Circuit formally vacated the SEC’s buy-back disclosure rules. While it is unclear what, if any, action the SEC may take in response to this definitive ruling, the realistic options appear to be commencing a new process to propose and adopt new rules, or to abandon the rule-making project for the time-being. Before proposing new rules, the SEC would have to develop the empirical evidence justifying them that the court determined that the SEC lacked. Either way, we expect that the SEC staff will seek to press issuers through interpretive guidance and the filing review process to provide more disclosure about their buy-back programs. The Enforcement Division will likely also continue to be on the lookout for potential new cases involving buy-back programs. We do not believe that the SEC will seek permission to appeal to the U.S. Supreme Court.  

Issuers will no longer have to comply with the now-vacated rules, which would have imposed significant new monitoring and disclosure requirements. Calendar year companies would have had to begin to comply for their annual reports on Form 10 K (or 20 F for foreign private issuers) filed in 2024 and covering buy back activity in the fourth quarter of 2023. The vacated rules would have required narrative disclosure describing the issuer’s rationales and objectives for engaging in the buy back program, as well as any policies or restrictions it placed on trading by officers and directors during the period in which the company is repurchasing shares. Quarterly, issuers would have had to file an exhibit including tabular disclosure of daily quantitative share repurchase information, including the average price and number of shares repurchased each day, as well as disclosure of repurchases made pursuant to Rule 10b5-1 and 10b-18 (the limited safe harbor from market manipulation concerns). Foreign private issuers would have been required to provide the disclosure in their annual reports on Form 20 F and on new Form F SR. 

Please read our original post on this topic here.

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Photo of Frank Zarb Frank Zarb

Frank Zarb is a partner in our Corporate Department and a member of the Capital Markets Group, where he concentrates his practice on equity finance and a wide range of regulatory matters under U.S. federal securities laws.

He counsels public and private companies…

Frank Zarb is a partner in our Corporate Department and a member of the Capital Markets Group, where he concentrates his practice on equity finance and a wide range of regulatory matters under U.S. federal securities laws.

He counsels public and private companies, hedge funds and family offices, and market intermediaries and other financial institutions on a wide range of transactional and securities regulatory compliance matters including:

  • Equity investments and dispositions in public and private companies
  • Public company registration, disclosures and preparation of periodic reports
  • Tender offers, equity lines, proxy contests, SPACs, and other highly regulated transactions
  • Regulation M, Regulation SHO, Forms 13F and 13H, insider trading and other trading issues
  • Corporate governance and stock exchange listing standards
  • Federal and state proxy requirements as well as shareholder proposals and communications
  • Regulation of financial intermediaries, including trading of public and private equity, and complex and novel trading structures
  • Advocating with the SEC on behalf of a market intermediary related to back-office processing matters.

Frank’s practice is both domestic and international, beginning with his experience in senior positions with the Securities and Exchange Commission. As a member of the staff of the SEC’s Office of International Corporate Finance, Frank advised U.S. companies seeking to do business in the EU, Asia and the Middle East, as well as companies from those regions doing business in the U.S., or otherwise seeking to comply with the U.S. securities laws.  In the Office of Chief Counsel, he focused on federal proxy rules, and supervised a team of staff members that provided guidance in the course of proxy season.

Prior to joining the Firm, Frank was deputy general counsel/chief securities counsel for Bristol Myers Squibb Co. in a new position required by the SEC. Prior to joining Bristol-Myers, Frank was a corporate partner with Morgan, Lewis & Brockius.

Social Responsibility

Frank is a Trustee of the Gerald R. Ford Presidential Foundation, and he provides significant pro bono assistance to non-profit social service institutions in the Washington, D.C. area.