On May 3, the SEC finalized a rule requiring companies to disclose daily stock buyback information either quarterly or semiannually. The required disclosures include the number of shares repurchased each day and the average price paid for each day on which a repurchase was conducted.
Also under the rule, companies will have to check a box indicating whether certain directors or officers traded in the relevant securities within four business days before or after the public announcement of an issuer's buyback plan or program.
The amendments expand the narrative buyback disclosure requirements to include a company's objectives or rationales for buybacks and the process or criteria used to determine the amount of repurchases; and any policies and procedures relating to buybacks and sales of the company's securities during a buyback program by its officers and directors, including any restriction on such transactions.
The U.S. Chamber in a news release said stock buybacks efficiently distribute capital to where it is most likely to result in the investments that grow businesses and add value for shareholders and Main Street investors.
"The SEC's stock buyback rule doesn't protect investors," said Neil Bradley, the Chamber's executive vice president and chief policy officer, in the news release. "Instead, it puts the thumb on the scale to discourage buybacks despite the fact that the repurchasing of shares improves returns for savers and investors across the economy."
At the SEC's May 3 meeting, Chairman Gary Gensler said buybacks reportedly reached more than $1.25 trillion in 2022, up from nearly $950 billion in 2021. The rule "will increase the transparency and integrity of this significant means by which issuers transact in their own securities," Mr. Gensler said.
An SEC spokeswoman said in an email that the commission "undertakes rule-making consistent with its authorities and laws governing the administrative process, and we will vigorously defend the challenged rule in court."
Last month, a federal judge sided with the SEC in a separate lawsuit brought by the Chamber and two other business groups challenging the agency's 2022 rule-making on proxy-voting advice.
