U.S. Appeals Court Vacates SEC Final Rule on Share Buyback Disclosures

The U.S. Court of Appeals for the Fifth Circuit has vacated the SEC’s final rule on share buyback disclosures, which was originally intended to modernize and enhance the Commission’s disclosure requirements related to an issuer’s share repurchase activities and programs.

The court had found the rule defective on October 31, 2023, and had given the SEC 30 days to cure the defects. Further, the court had denied the SEC’s request for an extension of the 30-day period on November 26, 2023. In its judgment regarding the vacating of the rule, the court stated that “[t]he SEC acted arbitrarily and capriciously, in violation of the [Administrative Procedure Act], when it failed to respond to petitioners’ comments and failed to conduct a proper cost-benefit analysis.”