SEC's Share Repurchase Rule Faces Uncertainty Following Fifth Circuit Decision

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Dec 20, 2023

On December 20, 2023, the United States Court of Appeals for the Fifth Circuit vacated the Securities and Exchange Commission's (SEC) share repurchase disclosure rule, which mandated detailed tabular disclosure of daily repurchase data.

The decision, prompted by a legal challenge from the U.S. Chamber of Commerce, Longview Chamber of Commerce, and Texas Association of Business, deemed the SEC's actions arbitrary and capricious, citing a lack of response to comments and insufficient cost-benefit analysis. Despite a 30-day remand period, the SEC was unable to rectify the rule's defects, leading to its ultimate vacatur.

The ruling signifies the conclusion of the share repurchase disclosure rulemaking, pending potential further actions.

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