The SEC
will meet at 10 a.m. EST Wednesday, December 15th to
discuss whether to amend share buyback regulations and 10b5-1 plan rules, among other items.
Share Buybacks. The Commission will consider whether to require more detailed and frequent disclosure about share repurchases.
10b5-1 Plans. The Commission will consider more stringent practice and disclosure regulations regarding use of 10b5-1 plans. Based on recent
comments by Chair Gensler, we expect these to take the following form:
- A mandatory cooling off period between implementing the plan and the first trade (possibly 4-6 months in duration).
- Limitations on canceling a plan (especially when in possession of material non-public information).
- Enhanced disclosure on the adoption, modification, and terms of 10b5-1 plans.
- Limits on the number of plans insiders may enter into at one time.
Lawmakers including Senator Elizabeth Warren have long been critical of both stock buybacks (see Warren’s recent letter to Hertz on its proposal to buy back stock amid a bankruptcy process) and 10b5-1 plans, so neither agenda topic is unexpected. Added to the rapidly growing list of SEC actions, the meeting portends an extremely active winter for the agency.
