As previously reported, on October 31, 2023, the U.S. Court of Appeals for the Fifth Circuit concluded that the process used by the SEC in adopting its share repurchase modernization rules violated the Administrative Procedure Act and sent the rules back to the Securities and Exchange Commission (SEC). The SEC has until November 30 to attempt to repair the defects noted by the court.

On November 22, 2023, in light of the Fifth Circuit’s decision, the SEC issued an order postponing the effective date of the new repurchase rules. As a result, we believe it is unlikely that the new repurchase rules will be effective prior to the filing of Form 10-Ks for calendar year-end companies. However, as the ultimate disposition of this matter is uncertain, companies should continue to track daily repurchase activity in the event the rules go into effect in the future.

For more information regarding the repurchase rules, see our May 24, 2023 Update.