which is to be filed with the Commission quarterly. The Form F-SR will
be due 45 days after the end of the FPI's fiscal quarter to be
consistent with the latest deadline for a quarterly report on Form 10-
Q.\185\ FPIs that report on the FPI forms do not have a quarterly
reporting obligation under the Exchange Act and generally provide
repurchase disclosure only in their annual report on Form 20-F. Our
reasons for adopting quarterly reporting of daily repurchases for FPIs
reporting on the FPI forms are the same as for corporate issuers
reporting on domestic forms.\186\ In addition, similar to the

amendments we are adopting to our domestic forms, we are eliminating
the requirement in Form 20-F to provide quantitative share repurchase
disclosures on a monthly basis.\187\
---------------------------------------------------------------------------

    \185\ We are requiring a deadline for the Form F-SR of 45 days
after the end of the fiscal quarter for all four quarters, including
the final quarter of the fiscal year. While domestic corporate
filers receive additional time to file a Form 10-K following the
final quarter of their fiscal year, relative to the time for other
quarterly filings, this extended period is due to the additional
materials that must be included in the Form 10-K. Since no such
difference would exist for the fourth-quarter Form F-SR, we are
requiring a uniform filing deadline after each quarter.
    \186\ See letter from CII (stating that issuers that file on
domestic forms and FPIs that file on the FPI forms should be subject
to the same filing obligations). In addition, because FPIs are more
similar to corporate issuers filing on domestic forms than Listed
Closed-End Funds, we are keeping the disclosure frequency consistent
with such corporate issuers. Similarly, we do not believe that semi-
annual reporting of daily repurchase information would be
appropriate for FPIs that do not file on domestic forms for the same
reasons. Therefore, we believe that corporate issuers that file on
domestic forms and FPIs that file on the FPI forms should be subject
to the same filing obligations.
    \187\ Form F-SR contains an instruction stating that the
information reported on the form relates to the issuer's securities
in ordinary share form, whether the issuer has repurchased the
shares itself or depositary receipts that represent the shares.
---------------------------------------------------------------------------

    When it adopted the Item 703 disclosure requirements in 2003, the
Commission stated that it expected the Item 703 disclosures to provide
investors and the marketplace with important information regarding an
issuer's repurchase activity that would allow them to assess the impact
of an issuer's share repurchases on the issuer's stock price, similar
to periodic disclosure of issuer earnings and dividend payouts.\188\
Disclosure of a monthly aggregation of repurchases, however, does not
always allow investors to assess whether, for example, the bulk of an
issuer's repurchases were made in advance of a specific date, such as
the date on which incentive targets for compensatory awards are
measured or the day material nonpublic information is released to the
public.
---------------------------------------------------------------------------

    \188\ See 2003 Adopting Release, supra note 5, at 64962. We
disagree with the commenter who asserted that ``the Commission's
analysis . . . does not sufficiently explain its apparent reversal
of the prior position that the appropriate way to promote
efficiency, competition, and capital formation is to `minimize the
market impact of the issuer's repurchases, thereby allowing the
market to establish a security's price based on independent market
forces without undue influence by the issuer' '' and that this is
not accomplished by ``highlighting them in daily disclosures.'' See
letter from Chamber II. In 2003, the Commission stated that ``Rule
10b-18's safe harbor conditions are designed to minimize the market
impact of the issuer's repurchases.'' See 2003 Adopting Release,
supra note 5. This statement was not in reference to the monthly
repurchase disclosures the Commission adopted at the same time in
Item 703, which the Commission stated were ``intended to enhance the
transparency of issuer repurchases.'' Id. As noted throughout this
release, the amendments we are adopting are similarly intended to
enhance the transparency of issuer repurchases.
---------------------------------------------------------------------------

    The Commission proposed additional share repurchase disclosures to
provide investors with further insight into the details of an issuer's
share repurchases, which when combined with other information available
about the issuer, could diminish informational asymmetry, enhance
transparency, and enable investors to undertake a more thorough
assessment of issuer share repurchases.\189\ Investors could use this
more detailed disclosure to monitor and evaluate issuer share
repurchases and their effects on the market for the issuer's
securities.
---------------------------------------------------------------------------

    \189\ See Proposing Release, supra note 2, at 8446.
---------------------------------------------------------------------------

    In some circumstances, such as when repurchases may affect the
value of compensatory awards to executives or the amount for which
executives can sell such awards, issuers may have incentives to engage
in share repurchases for reasons other than to increase or signal the
issuer's fundamental value. In addition, issuers are repurchasing their
own securities, so they will typically have significantly more, as well
as more detailed, information about the issuer and its future
prospects. Thus, as we have described above, investors will benefit
from having additional disclosures that will enable them to evaluate
the efficiency of share repurchases or determine a pattern of when
repurchases could be timed to affect compensation or to benefit from
material nonpublic information, among other possible uses of daily
repurchase data, thereby increasing investor confidence.
    We disagree with commenters who asserted that we have not
identified a ``market failure'' that would justify the additional
disclosures.\190\ In particular, these commenters asserted that there
is no market failure because information asymmetry is advantageous to
markets in that it incentivizes some market actors to expend resources
developing information that would be relevant to an issuer's share
price.\191\ We disagree with these arguments. As the sources cited by
the commenters themselves point out, informational asymmetries are not
necessary to incentivize the production of information.\192\ In the
case of repurchases, relevant information about stock repurchases is
often nonpublic, and thus not typically discoverable by third parties,
including investors, who would benefit from the additional information
conveyed by daily repurchase disclosures. We discuss in more detail the
market failures addressed by the amendments in the Economic Analysis
section, below.\193\
---------------------------------------------------------------------------

    \190\ See, e.g., letters from Chamber II and Profs. Lewis and
White.
    \191\ Id.
    \192\ See Grossman, S.J. & Stiglitz, J.E., On the Impossibility
of Informationally Efficient Markets, 70 Am. Econ. Rev. 393, 404
(1980) (noting that there is also an incentive to acquire
information if ``no one is informed'').
    \193\ See infra Section V.B.1.
---------------------------------------------------------------------------

    One commenter also asserted that no amendments were necessary
because investors can already glean all necessary information from
existing filings, such as through quarterly filings, mandatory
disclosures of material new repurchase plans, or potential voluntary
disclosures of data issuers deem material to investors.\194\ For
example, the commenter noted that investors can likely infer instances
when repurchases have helped an issuer hit an EPS target because
quarterly filings will reveal aggregate repurchases over the quarter as
well as earnings.\195\
---------------------------------------------------------------------------

    \194\ See letter from Profs. Lewis and White.
    \195\ Id.
---------------------------------------------------------------------------

    While we agree these kinds of informed conclusions based on
existing quarterly data are possible, existing disclosures are
inadequate to provide investors with the information needed to fully
understand the actual impact of a repurchase. Data on daily purchases
are more informative, and so will enable more accurate assessments of
the motives for repurchases. For example, repurchases conducted in the
days immediately before the end of a fiscal quarter, at a time when the
issuer's managers are very likely to know that the issuer will miss an
EPS target, would suggest that the repurchase likely does not fully
signal the issuer's fundamental value, in a way that would not be the
case if such repurchases were conducted in an equal amount each day of
the quarter. Monthly aggregates also are unlikely to consistently
reveal whether repurchases occurred before or after award grants or
trades by executives, which could similarly signal that the repurchase
was, in part, motivated by purposes other than shareholder value.\196\
---------------------------------------------------------------------------

    \196\ For this reason, we also disagree with the commenter
suggestion that we could have replaced disclosure of daily
repurchase data with a requirement that the issuer discuss the
impact repurchases may have had on managers' ability to reach
earnings per share targets in its Compensation Discussion and
Analysis (``CD&A'') required pursuant to 17 CFR 229.402(b) (Item
402(b) of Regulation S-K). See id. Such a discussion would not allow
investors to identify which repurchases may have been affected by
managers' incentives, and would not account for other avenues
through which repurchases may affect compensation, such as by
increasing stock prices shortly before a manager sells equity.
Finally, this approach would also fail to identify instances in
which issuers or their managers are driven by other concerns, such
as internal EPS targets that do not affect compensation but instead
affect reputation, retention, or relationships with creditors.
---------------------------------------------------------------------------

    One commenter suggested that the amendments are not needed when the
issuer's trades would qualify for a safe harbor provision of Rule 10b5-
1.\197\ Instead, we think that the concerns that justify disclosure
apply fully in that setting. An issuer's use of a Rule 10b5-1 trading
plan would not, for example, affect executives' ability to time trades

to profit from repurchases. In addition, because there is no required
cooling-off period for issuers, there is an increased risk that an
issuer could adopt and then begin trading under a Rule 10b5-1 trading
plan at a time when it may be aware of material nonpublic
information.\198\ Thus, additional disclosure (including whether the
repurchase was intended to qualify for the affirmative defense under
Rule 10b5-1) is necessary for investors to evaluate the efficiency and
impacts of a repurchase.\199\
---------------------------------------------------------------------------

    \197\ See letter from Cravath.
    \198\ See Rule 10b5-1 Adopting Release, supra note 18, at 80369.
In the Rule 10b5-1 Adopting Release, the Commission did not adopt a
cooling-off period for issuers, stating that ``further consideration
of potential application of a cooling-off period to the issuer is
warranted.'' Id. at 80371-80372. Please see the discussion of new
Item 408(d), infra Section III.D.
    \199\ For similar reasons, we disagree with the commenters who
stated that compliance with Rule 10b-18 would make the proposed
daily repurchase disclosures unnecessary. See letters from HP and
SCG. As we discuss below in this section, whether a trade is
intended to qualify for the non-exclusive safe harbor of Rule 10b-18
may help investors to understand the efficiency of a given
repurchase. In addition, the fact that a repurchase is intended to
qualify for the safe harbor does not significantly affect an
executive's ability to time a personal trade to profit from a
repurchase.
---------------------------------------------------------------------------

    We also disagree with the commenter who asserted that to the extent
managers benefit from repurchases through an increased share price,
this increase also benefits other existing shareholders, and so no
disclosure is needed.\200\ Because managers can benefit from
controlling the timing or volume of repurchases, it is more difficult
for investors to interpret the extent to which repurchases increase or
signal the issuer's fundamental value. Similarly, issuers may take
actions to improve the returns on repurchases, such as real earnings
management or repurchases while aware of material nonpublic
information, that may benefit some existing shareholders, but at the
potential expense of long-term liquidity and investor confidence.\201\
Thus, notwithstanding that there may be some investors who benefit in
these scenarios, daily repurchase disclosure is necessary to protect
all investors and the efficient operation of securities markets because
daily data, in combination with other data, would allow investors to
infer when repurchases may have been timed to benefit managers or
otherwise at the expense of some investors.
---------------------------------------------------------------------------

    \200\ See letter from Maryland Bar.
    \201\ See, e.g., Cooper, L.A., Downes, J.F., and Rao R.P., Short
term real earnings management prior to stock repurchases, 50 Rev.
Quant. Fin. & Acct. 95 (2018) (reporting that managers use inventory
and discretionary expenses, among other items, to manipulate
reported earnings in advance of repurchases).
---------------------------------------------------------------------------

    For similar reasons, we disagree with that commenter's request that
we limit new disclosures to discussion about the effects of repurchases
on an executive's compensation.\202\ While such discussion might be
generally informative about whether an issuer's repurchases may have
been affected by managerial incentives, it would not reveal which
particular repurchases were so affected, and would not address issuer
efforts to achieve particular accounting targets for reasons unrelated
to executive compensation, such as promotion, retention, or creditor
preferences.
---------------------------------------------------------------------------

    \202\ See letter from Maryland Bar.
---------------------------------------------------------------------------

    Further, we disagree with the suggestion by some commenters that we
abandon or delay the amendments because of the recently-enacted tax on
certain share repurchases,\203\ because we expect that the tax will not
meaningfully affect the rationales for the final amendments. As we
describe in more detail below,\204\ we acknowledge that it is possible
that the new one percent tax on some repurchases will reduce annual
repurchases from their current volume of roughly $950 billion,\205\
although some indications are to the contrary.\206\ While any reduction
in repurchase activity would potentially diminish the costs and
benefits of the final amendments, given the vast volume of current
repurchases, we believe that that there will continue to be a
compelling need for enhanced disclosure related to these transactions.
Notwithstanding a commenter's suggestion that the tax would deter
``opportunistic'' buybacks,\207\ to the extent that there are
repurchases for which managerial self-interest plays some role, we do
not expect the tax to have a significant effect on the intended
benefits of the final amendments.\208\
---------------------------------------------------------------------------

    \203\ See, e.g., letters from Chamber III, Chamber V, and PSC.
    \204\ See infra Section V.A.2.
    \205\ See Section V.A.2 infra and note 384 and accompanying
text.
    \206\ See Williams-Alvarez, J., The 1% Stock-Buyback Tax Hasn't
Slowed Repurchases. A Proposed 4% Tax Might, Wall St. Journal, Mar.
2, 2023 and Avi-Yonah, R.S., A Different Tax on Stock Buybacks,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4301215 (Dec.
13, 2022) (``[A] 1% tax on buybacks is unlikely to reduce
buybacks.'').
    \207\ See letter from Chamber III.
    \208\ See Moore, supra note 34 (reporting that managerial
benefit from repurchases is not sensitive to the cost of
repurchasing).
---------------------------------------------------------------------------

    Although a number of commenters asserted that daily reporting of
daily data would generally result in an overload of information for
investors,\209\ our adoption of periodic reporting should significantly
reduce these concerns, as some commenters noted.\210\ In any event, we
disagree that information about issuers' daily trading will overload
investors.\211\ Rather than overloading investors with superfluous
data, the information required by the final amendments will provide
them with additional insight into the precise timing of repurchases
that they can use to evaluate the efficiency of and motives for the
issuer's share repurchases in a way that is not possible to do with the
current requirement to disclose monthly data.
---------------------------------------------------------------------------

    \209\ See, e.g., letters from Dow, Kirkland Ellis, NYSE, SCG,
and Vistra.
    \210\ See, e.g., letters from Anthem Advisors, Cravath, and
Jones Day.
    \211\ See letter from Roosevelt (stating that the daily
repurchase disclosures would not create an overabundance of
information for investors).
---------------------------------------------------------------------------

    We also disagree with commenters who asserted that more detailed
information would harm smaller retail investors by making the
information too disaggregated to easily parse.\212\ The daily data will
be required to be tagged using Inline XBRL, so these investors and
other market participants will be able to collate that daily data to
another level of detail to suit their level of sophistication. In some
instances, monthly data fail to reveal key details about repurchase
activity, such as whether repurchases occur before or after release of
material nonpublic information.
---------------------------------------------------------------------------

    \212\ See, e.g., letters from ACLI, Armstrong, ASA, Chevron,
Cravath, Dow, Guzman, Hecht, Home Depot, Jones Day, NYSE, PNC,
Profs. Lewis and White, Quest, SCG, Shearman, SIFMA II, and Simpson
Thacher.
---------------------------------------------------------------------------

    Furthermore, greater transparency ultimately benefits all
investors. For example, newly available data may incentivize
intermediaries, such as investment advisers, to develop the capacity to
analyze the data and provide their analysis to retail or other
clients.\213\ Additionally, to the extent that some traders may have
greater capacity to quickly analyze information about daily
repurchases,\214\ our adoption of periodic reporting should mitigate
any such advantage by allowing for fewer arbitrage opportunities.
---------------------------------------------------------------------------

    \213\ Cf. letter from Profs. Lewis and White (arguing that
information asymmetry incentivizes market actors to acquire
information for use by others).
    \214\ See, e.g., letters from ACCO, Armstrong, ASA, BPI & Amer.
Bankers Assoc., Business Roundtable, Cato, Chevron, Coalition,
Cravath, Davis Polk, DLA Piper, Dow, Empire, FedEx, Guzman, Home
Depot, HP, IBC, Jones Day, NAM, NYC Bar, Norfolk Southern, PA
Chamber, Paul Weiss, PNC, Profs. Lewis and White, Quest, Shearman,
SIFMA II, SCG, Simpson Thacher, Stephens, Sullivan, T. Rowe Price,
Vistra, and Wilson Sonsini.
---------------------------------------------------------------------------

    Relatedly, some commenters raised concerns that daily disclosures
would result in disclosure of information that is not material to
investors,\215\ or asked

the Commission to include a materiality standard in the final
amendments.\216\ We considered, but rejected, suggestions by these
commenters to require disclosure only of material daily repurchases,
such as repurchases that in the daily aggregate represent one percent
or more of the issuer's outstanding shares. As we have explained, we
believe that in many cases it is not only the amount, but also the
timing of, repurchases that makes them informative to investors.
Assessments of materiality for every repurchase conducted by the issuer
would add significant costs. Further, limiting disclosures to a volume
threshold, such as relatively large aggregate daily purchases, whether
a set one percent figure or otherwise, could encourage issuers that
prefer to avoid disclosure to inefficiently divide their planned
transactions over multiple days or weeks, as pointed out by one
commenter.\217\
---------------------------------------------------------------------------

    \215\ See letter from Profs. Lewis and White.
    \216\ See, e.g., letters from Hecht and NASAA.
    \217\ See letter from SIFMA II (stating that issuers may limit
their average daily trading volume to try to ensure that
sophisticated investors view the daily trades as immaterial, even if
a larger volume would be more beneficial to shareholders).
---------------------------------------------------------------------------

    We recognize that certain issuers could conduct a number of daily
repurchases every quarter, which may result in lengthy additional
disclosures in a filing. To address this concern, the final amendments
require corporate issuers that report on Forms 10-Q and 10-K to file
daily reporting data as an exhibit to their periodic reports instead of
in the body of those reports. Listed Closed-End Funds will be required
to provide their daily repurchase data in the body of Form N-CSR and
FPIs that report on the FPI forms will be required to provide their
daily repurchase data in the body of Form F-SR. Form N-CSR contains
information on a range of specific topics (such as a fund's code of
ethics or, in this case, repurchases) such that providing share
repurchase disclosures in the body of the form presents fewer
readability concerns. On the other hand, Form F-SR will be used
exclusively to report daily repurchase data, so there is no concern
that the daily repurchase data will obscure other disclosures in that
form.
    In another change from the proposal, the final amendments will
require the daily repurchase data to be filed instead of furnished.
Because daily repurchase data will be provided on a quarterly or semi-
annual basis, depending on the status of the issuer, the liability
concerns that may have been raised by a requirement to file daily
repurchase data within the proposed one business day timeframe are
alleviated. The issuer will have more time to obtain, verify, and
compile the disclosure compared to the proposal. As a result, we find
it appropriate for issuers to be subject to Exchange Act section 18
liability for the new repurchase disclosure, as they are currently for
filings under Item 703 of Regulation S-K, and the information will be
deemed incorporated by reference into filings under the Securities Act,
which will be subject to Securities Act section 11 liability.
    Additionally, the final amendments eliminate the requirement in
current Item 703(a) of Regulation S-K that issuers disclose their
monthly quantitative repurchase data in their periodic reports.\218\
Presently, Item 703 requires corporate issuers reporting on domestic
forms to provide monthly quantitative repurchase data on a quarterly
basis in their Form 10-Qs and Form 10-Ks (for the issuer's fourth
fiscal quarter), Item 16E of Form 20-F requires FPIs to provide monthly
repurchase data in their annual reports on Form 20-F, and Item 14 of
Form N-CSR requires Listed Closed-End Funds to provide monthly
repurchase data in their semi-annual reports on Form N-CSR. In light of
the new requirements to disclose daily repurchase data, we no longer
believe this information is necessary. To the extent that investors,
market participants, and others are interested in monthly repurchase
data, they will be able to collate that data themselves, including by
using Inline XBRL.
---------------------------------------------------------------------------

    \218\ Additionally, the final amendments move much of disclosure
in current Item 703(b) to new Item 703(a) and new Item 601(b)(26).
---------------------------------------------------------------------------

    Consistent with the proposal, the final amendments do not include
any exemptions.\219\ We have not exempted any category of issuer
because disclosure of daily repurchase data benefits all investors in
issuers that conduct repurchases.\220\ Additionally, to the extent that
certain issuers, such as SRCs, have relatively high information
asymmetries, disclosure about their repurchases may be more informative
to investors. Moreover, although some issuers may provide similar
information to other regulators, requiring all issuers to comply with
the final amendments facilitates investor access because the
information will be disclosed in a common location. In the case of
financial institutions, while one commenter asserted that capital
regulations by other regulators would prevent the institutions from
engaging in opportunistic repurchases,\221\ we are not aware of any
specific regulations that would prevent executives at those
institutions from profiting from repurchases, or that would limit
repurchases at times the institution's managers are aware of material
nonpublic information. We do not believe that any general insights into
an issuer's capital planning that financial-institution regulations
might offer will provide the level of detail investors would receive
from disclosure of daily trade data and specific qualitative discussion
of repurchase policies.
---------------------------------------------------------------------------

    \219\ MJDS filers currently do not provide repurchase disclosure
analogous to Item 703 (for filers on the domestic forms) or Item 16E
for foreign private issuers that report using Form 20-F. Consistent
with that approach, we are not imposing the amended repurchase
disclosure requirements on Canadian issuers that file using the MJDS
because those issuers are subject to a separate reporting regime.
Under the MJDS, eligible Canadian issuers may satisfy certain
securities registration and reporting requirements of the Commission
by providing disclosure documents prepared in accordance with the
requirements of Canadian securities regulatory authorities. See
Multijurisdictional Disclosure and Modifications to the Current
Registration and Reporting System for Canadian Issuers, Release No.
33-6902 (Jun. 21, 1991) [56 FR 30036 (July 1, 1991] (``MJDS
Release'').
    \220\ As noted above, several commenters recommended that we
exempt issuers conducting repurchases with respect to securities
that are not traded on an exchange from the daily repurchase
disclosures. See letters from Nareit and Publix. However, as
discussed in Section V.D.3, such an exemption would deprive
investors in these issuers of the informational benefits of the
final amendments, which might be relatively more consequential for
investors in issuers with a thin trading market or without a trading
market that lack the price discovery from active trading. In
addition, we note that these issuers are already required to provide
share repurchase disclosures under existing Item 703.
    \221\ See letter from BPI & Amer. Bankers Assoc.
---------------------------------------------------------------------------

    Moreover, the commenter suggested that the final amendments would
encourage dividend distributions instead of share repurchases as the
preferred mechanism for returning capital to shareholders, which would
tend to undermine banks' fiscal soundness and, the commenter suggests,
be inconsistent with Federal Reserve policies, because dividends
represent a more binding commitment of future resources.\222\ As with
other issuers, we do not believe the amendments significantly affect
the relative appeal of repurchases for financial institutions, and even
if so, are also aware that financial institutions may have other
alternatives to traditional dividends, such as special dividends, that
may not raise the same concerns with respect to the commitment of
future resources.
---------------------------------------------------------------------------

    \222\ See id.
---------------------------------------------------------------------------

    In addition, our adoption of quarterly disclosures mitigates some
of the concerns of commenters seeking an exemption for various issuer
categories,\223\ which discussed the

burden of the proposed requirement to provide daily repurchase data one
business day after execution of the issuer's share repurchase order.
The final amendments do not require issuers to provide daily repurchase
data the day after execution. As a result, we expect the change from
the proposal to require quarterly reporting (or semi-annual reporting
for Listed Closed-End Funds) to substantially alleviate commenters'
cost concerns for all issuer categories.\224\
---------------------------------------------------------------------------

    \223\ See letters from ABA Committee, ACCO, ADISA, Better
Markets I, BPI & Amer. Bankers Assoc., BrilLiquid, CBA, CFA
Institute, CII, Cravath, Hecht, IBC, ICGN, ICI I, Nareit, NYC Bar,
NYSE, Profs. Lewis and White, Roosevelt, SIFMA II, Sullivan, TIAA,
TotalEnergies, and VEUO.
    \224\ See, e.g., letters from ICI I (stating that, in the event
the Commission determines to apply the proposal to Listed Closed-End
Funds, it should ``exclude them from the Form SR reporting
requirements and, instead, require funds to provide the daily
information less frequently in their Form N-CSR'' because of ``the
unique characteristics of funds, including their status as pass-
through investment vehicles with disclosed NAVs that promptly
reflect the effects of share repurchases, and the diminished
concerns that fund insiders will misuse share repurchases for their
own self-interest'') and Roosevelt (stating generally that ``it is
likely that these foreign issuers are already disclosing this
information in other jurisdictions, so would not incur compliance
costs'').
---------------------------------------------------------------------------

    Additionally, we note that some commenters asked the Commission
specifically to exempt FPIs that are required to provide share
repurchase information in their home country disclosures and furnish
that information on Form 6-K.\225\ Consistent with our requirements
generally,\226\ if an FPI's home country disclosures furnished on a
Form 6-K satisfy the Form F-SR requirements, it can incorporate by
reference its Form 6-K disclosures into its Form F-SR. Therefore, we do
not believe such an exemption is necessary. FPIs that already disclose
daily data in another jurisdiction will experience only incremental
burdens in reporting those transactions. While these data may already
be available to some investors, making them accessible to all
investors, at the same frequency as for corporate issuers that file on
domestic forms, will allow investors to receive the same information
for FPIs as they receive for corporate issuers that file on domestic
forms, regardless of the form FPIs choose to use.\227\ To the extent
that these disclosures may benefit an issuer's competitors, placing FPI
filing obligations on the same tempo as corporate issuers that file on
domestic forms will also help to level competition between FPIs and
those issuers.
---------------------------------------------------------------------------

    \225\ See, e.g., letters from SIFMA II, Sullivan, and VEUO.
    \226\ See 17 CFR 240.12b-23.
    \227\ One commenter asserted that EU regulations with respect to
insider trading and market manipulation reduce the need for
additional disclosure with respect to repurchases. See letter from
VEUO. We disagree with this suggestion for essentially the same
reasons we disagree with commenters who made similar arguments
regarding Rules 10b5-1 and 10b-18.
---------------------------------------------------------------------------

    Other commenters requested that FPIs not be required to disclose
the total number of shares repurchased in their home countries in
reliance on the safe harbor in Rule 10b-18 nor the total number of
shares purchased pursuant to a plan that is intended to satisfy the
affirmative defense conditions of Rule 10b5-1(c).\228\ We believe,
however, that these disclosures help investors to understand the
purposes for a repurchase. The final amendments, therefore, include
those disclosure requirements. To the extent that issuers do not rely
on the safe harbor or affirmative defense for trades conducted outside
the United States, any disclosure obligation on FPIs will be minimal.
If such issuers are concerned about any negative inferences, they may
include additional disclosure explaining why they chose not to rely on
such safe harbor or affirmative defense.
---------------------------------------------------------------------------

    \228\ See, e.g., letters from SIFMA II and VEUO.
---------------------------------------------------------------------------

    We are revising the proposed requirement to disclose whether
purchases were ``made in reliance on'' the Rule 10b-18 non-exclusive
safe in response to commenters' concerns that issuers are only able to
indicate their intent to comply with the safe harbor. The final rule
will therefore require disclosure of purchases that were ``intended to
qualify for'' the safe harbor.\229\
---------------------------------------------------------------------------

    \229\ See, e.g., letters from SIFMA II and Sullivan. We note the
commenters suggested that we adopt the phrase ``intended to comply
with'' the safe harbor, but we believe it is more clear to require
that issuers disclose whether trades were ``intended to qualify
for'' the safe harbor.
---------------------------------------------------------------------------

    We have also modified the manner in which issuers will report
certain information relating to Rules 10b-18 and 10b5-1. Proposed Form
SR would have required issuers to disclose, in a table, the total
number of shares purchased daily in reliance on Rule 10b-18 or intended
to qualify for the affirmative defense provisions of Rule 10b5-1(c).
The proposed amendments to Item 703, Form 20-F, and Form N-CSR would
have similarly required issuers to disclose, by footnote to their
monthly repurchase table or the narrative accompanying the table, the
number of shares purchased in reliance on Rule 10b-18 and the number
intended to qualify for the affirmative defense provisions of Rule
10b5-1(c) (and if so, the date(s) the plan was adopted or terminated).
    The final amendments require issuers to disclose, in tabular form,
the number of shares purchased daily in reliance on Rule 10b-18 or
intended to qualify for the affirmative defense provisions of Rule
10b5-1(c), as proposed. In a change from the proposal, the final
amendments also require issuers to disclose, by footnote to the daily
repurchase table, the date any plan that is intended to satisfy the
affirmative defense conditions of Rule 10b5-1(c) for the shares was
adopted or terminated. The proposed amendments would have required this
information in the narrative disclosures accompanying the monthly
repurchase table required by Item 703, Form 20-F, and Form N-CSR. After
changing the frequency that issuers must provide their daily
quantitative share repurchase disclosure from one business day after
execution, as proposed, to quarterly or semi-annually in the final
amendments, and deleting the monthly repurchase table from Item 703,
Form 20-F, and Form N-CSR, we believe that requiring this Rule 10b-18
and Rule 10b5-1(c) information in both the table and the narrative
discussion would be duplicative. Requiring this information with the
table would be more efficient for issuers and easier to understand for
investors.
    Contrary to some commenters, we believe that whether an issuer
intended to make use of Rule 10b-18 or Rule 10b5-1 in conducting its
repurchases provides useful information to investors. The disclosure as
to whether purchases were intended to qualify for the Rule 10b-18 non-
exclusive safe harbor or the affirmative defense under Rule 10b5-1
provides investors with deeper insight into how an issuer has
structured and designed its repurchase program. The disclosure with
respect to Rule 10b-18 allows investors to gauge whether the given
repurchase program is designed to ``minimize the market impact of the
issuer's repurchases, thereby allowing the market to establish a
security's price based on independent forces.'' \230\ Further, this
disclosure could provide a more informed understanding of how many
shares may yet be purchased under the timing and volume parameters of
Rule 10b-18, reducing information asymmetries for current and
prospective shareholders. In these ways, the disclosure will allow
investors to better evaluate the efficiency and impacts of a
repurchase. While some commenters indicated that as a matter of
practice repurchase programs are designed to meet both the Rule 10b-18
and Rule 10b5-1 safe harbors,\231\ issuers are not required to do so.
Additionally, with disclosure of whether an issuer intended to satisfy
the affirmative defense under Rule 10b5-1,

investors can more readily determine whether the issuer's managers took
steps to mitigate the possibility of conducting a repurchase while in
possession of material nonpublic information.
---------------------------------------------------------------------------

    \230\ 2003 Adopting Release, supra note 5, at 64953.
    \231\ See, e.g., letters from HP and Simpson Thacher.
---------------------------------------------------------------------------

    Moreover, we are cognizant of the concern shared by some commenters
that the required Rule 10b5-1(c) and Rule 10b-18 disclosures could lead
to unfounded speculation or cause negative inferences.\232\ Rule 10b-18
specifically disclaims any negative inference from an issuer's choice
not to make use of the safe harbor, and Rule 10b5-1 is similarly
described as an ``affirmative defense.'' Therefore, we believe that any
unwarranted inferences from disclosure that an issuer did or did not
use such safe harbor or defense would be limited. We believe the
required disclosures achieve a proper balance between that concern and
the need of investors for additional information concerning an issuer's
share repurchases.
---------------------------------------------------------------------------

    \232\ See, e.g., letters from Maryland Bar and Sullivan.
---------------------------------------------------------------------------

    We note that one commenter suggested that the final amendments
should include additional disclosures regarding an issuer's Rule 10b5-
1(c) plan, such as information on adoption, modification, suspension,
or termination of the plan; the maximum number of shares planned for
sale under the plan; and any suspensions or terminations of a planned
repurchase pursuant to such a plan.\233\ We have not included these
additional required disclosures relating to Rule 10b5-1(c) because we
believe the required information, together with existing obligations of
issuers to disclose material changes to their share repurchase plans
whether under Rule 10b5-1 or otherwise, is sufficient to inform
investors about an issuer's repurchases. The required disclosures
achieve an appropriate balance between the concerns expressed by
commenters and the need of investors for additional information
concerning an issuer's share repurchases. As discussed above in this
section, if any of the additional disclosures suggested by the
commenter or other additional disclosures are material and necessary to
make other repurchase disclosures not misleading under the
circumstances, the issuer must provide those disclosures.\234\
---------------------------------------------------------------------------

    \233\ See letter from CFA Institute.
    \234\ See 17 CFR 240.12b-20 (``Rule 12b-20'').
---------------------------------------------------------------------------

    Further, we note that some commenters recommended that we repeal
Rule 10b-18 and replace it with bright-line limits,\235\ and that we
not apply the proposed Rule 10b5-1(c) and Rule 10b-18 disclosures to
FPIs.\236\ Repealing and replacing Rule 10b-18 is beyond the scope of
this rulemaking. Consistent with our reasoning for not allowing an
exemption for certain issuers relating to the daily quantitative
repurchase disclosures, we do not believe the final amendments should
exempt FPIs from the Rule 10b5-1(c) and Rule 10b-18 disclosures. These
disclosures benefit all investors in issuers that conduct repurchases.
---------------------------------------------------------------------------

    \235\ See, e.g., letters from AFREF et al., CFA Institute, CII,
Lazonick & Jacobson, Oxfam, and Prof. Palladino.
    \236\ See letter from SIFMA II.
---------------------------------------------------------------------------

    One commenter expressed the view that the proposed amendments would
interfere with state law.\237\ The commenter asserted that the
Commission's purpose in proposing the amendments was to deter share
repurchases generally, which would ``regulate boardroom decisions over
which the Commission has no authority.'' The final amendments do not
regulate repurchases or board consideration of them, nor are they
intended to deter share repurchases. While it is possible that the
amendments could result in some reduction in issuer repurchases,\238\
we do not expect these additional disclosure requirements to have a
significant deterrent effect on these transactions overall. In any
case, the purpose of the final amendments is to provide shareholders
with additional data about the timing and other details of the issuer's
repurchases to allow them to make more informed investment and voting
decisions, consistent with our authority under the Exchange Act.
---------------------------------------------------------------------------

    \237\ See letter from Cato.
    \238\ See infra Section V.A.2.
---------------------------------------------------------------------------

    Another commenter asserted that the proposed amendments' daily
disclosure requirements would violate the First Amendment.\239\ The
commenter claimed that the Commission failed to explain why monthly
disclosures would not be adequate and did not acknowledge the
compelled-speech burdens that come with a next-day reporting regime.
The commenter also noted that the proposed amendments' ``unjustified
insistence on next-day reporting'' were not ``adequately tailored'' to
the governmental interests at stake and to reduce instances of
compelled speech.
---------------------------------------------------------------------------

    \239\ See letter from Chamber III.
---------------------------------------------------------------------------

    We disagree with the commenter's assertion that the proposed
amendments would violate the First Amendment. As we have explained
earlier in this section, periodic disclosure of daily repurchases
provide a level of detail that will allow investors to assess the
efficiency of, and motives for, those transactions. Additionally, daily
repurchase disclosure allows investors to monitor and evaluate the
issuer's share repurchases and their effects on the market for the
issuer's securities. This disclosure is thus factual in nature and
advances important interests as discussed throughout this release.
Further, after considering comments, the final amendments require
periodic reporting of an issuer's daily repurchases, as opposed to
daily reporting of an issuer's daily repurchases, which greatly
mitigates the associated burdens.
    Finally, we note that a number of commenters asked the Commission
to clarify certain terms, times, and transactions, including more
precisely defining ``share repurchase program,'' \240\ ``executed,''
\241\ ``business day,'' \242\ ``before the end;'' \243\ addressing
whether issuers operating in time zones other than Eastern Time would
be given additional time to file their Form SR; \244\ and clarifying
whether the proposal would encompass withhold-to-cover shares.\245\
Because the final amendments do not require issuers to provide their
daily quantitative repurchase disclosures one business day after
execution of their share repurchase order, there is no longer a need
for many of these requested clarifications.
---------------------------------------------------------------------------

    \240\ See letter from Cravath.
    \241\ See letters from Chamber II, Cravath, DLA Piper, FedEx,
HudsonWest, Simpson Thacher, and Wilson Sonsini.
    \242\ See letter from Bishop.
    \243\ See id.
    \244\ See letters from Chevron and HP.
    \245\ See letter from Nash.
---------------------------------------------------------------------------

    We do not believe it is necessary to make any further
clarifications based on the other comments received. The main
difference between the current Item 703 quantitative repurchase
disclosures and the quantitative repurchase disclosures in the final
amendments is that issuers are required to aggregate their share
repurchases on a daily basis instead of on a monthly basis. Therefore,
the terms, times, and transactions used for, and applicable to, the
current Item 703 disclosure requirements should be applied to the final
amendments.\246\
---------------------------------------------------------------------------

    \246\ For example, as we discussed in the Proposing Release, the
Commission uses a commonly understood meaning of the term
``execution,'' which will not change based on the final amendments.
See Proposing Release, supra note 2, at n. 23. We are not adopting
the suggestion of one commenter to instead require reporting based
on the settlement date rather than the execution date, see letter
from NASAA, because the commenter's concerns about the execution
date were tied closely to potential errors that might arise under an
execution-date regime with daily filing. Because we are adopting
quarterly reporting, we think the commenter's concerns about the
execution date will be greatly lessened, consistent with our
experience with Item 703.

---------------------------------------------------------------------------

B. Narrative Revisions to Item 703 of Regulation S-K, Form 20-F, and
Form N-CSR Additional Disclosure

1. Proposed Amendments
    The Commission proposed to revise and expand the disclosure
requirements in Item 703 of Regulation S-K, Form 20-F, and Form N-CSR
to work in conjunction with proposed Form SR to provide investors with
more detailed and qualitative information that they could use to
evaluate issuer share repurchases. Specifically, the proposal would
require an issuer to disclose:
     The objective or rationale for its share repurchases and
process or criteria used to determine the amount of repurchases;
     Any policies and procedures relating to purchases and
sales of the issuer's securities by its officers and directors during a
repurchase program, including any restriction on such transactions;
     Whether it made its repurchases pursuant to a plan that is
intended to satisfy the affirmative defense conditions of Rule 10b5-
1(c) and the date that the plan was adopted or terminated; and
     Whether purchases were made in reliance on the Rule 10b-18
non-exclusive safe harbor.
    Additionally, the Commission proposed to require that issuers
disclose if any of their officers or directors subject to the reporting
requirements under Exchange Act section 16(a) purchased or sold shares
or other units of the class of the issuer's equity securities that is
the subject of an issuer share repurchase plan or program within ten
business days before or after the announcement of an issuer purchase
plan or program by checking a box before the tabular disclosure of
issuer purchases of equity securities.
2. Comments on the Proposed Amendments
a. Comments on Objective or Rationale for Share Repurchases, and
Process or Criteria Used To Determine the Amount of Repurchases
    A number of commenters supported the proposal to require an issuer
to disclose its objective or rationale for its share repurchases, and
the process or criteria used to determine the amount of
repurchases.\247\ However, most commenters who discussed this proposal
opposed it.\248\ These commenters expressed concern that the required
disclosure could divulge competitive or sensitive information that
would be harmful to the issuer,\249\ or result in boilerplate
disclosure that would not prove meaningful to investors.\250\
---------------------------------------------------------------------------

    \247\ See, e.g., letters from CalPERS, CFA Institute, CII, ICGN,
Prof. Palladino, NASAA, Public Citizen, Roosevelt, and Senators
Rubio & Baldwin.
    \248\ See, e.g., letters from BPI & Amer. Bankers Assoc.,
Chamber II, Coalition, Cravath, Dow, Jones Day, Kirkland Ellis,
Morris, NAM, PNC, Profs. Lewis and White, SCG, Shearman, SIFMA II,
Sullivan, and Vistra.
    \249\ See, e.g., letters from BPI & Amer. Bankers Assoc., PNC,
Profs. Lewis and White, Shearman, SIFMA II, and SCG.
    \250\ See, e.g., letters from Chamber II, Coalition, Cravath,
Jones Day, Morris, NAM, and Sullivan.
---------------------------------------------------------------------------

    Other commenters objected to the proposal on the basis that the
disclosures could be misleading because they would show only a small
part of a company's overall liquidity and capital allocation
policies.\251\ These commenters suggested that any required objective
or rationale disclosures concerning an issuer's share repurchase plans
should be included within a filing's Management's Discussion and
Analysis of Financial Condition and Results of Operations (``MD&A'')
section, so that the disclosures can be evaluated within the larger
context of liquidity and capital allocation. Other commenters suggested
that the final amendments should not require the disclosure of all
share repurchase plans, but only those that are material to the
issuer.\252\ Another commenter asserted that the disclosures would
violate the First Amendment because they would require issuers to
provide disclosure other than ``purely factual, uncontroversial
information'' \253\ and would force the issuer to speak when doing so
would be unduly burdensome.\254\
---------------------------------------------------------------------------

    \251\ See, e.g., letters from ABA Committee, Dow, Profs. Lewis
and White, Quest, and Shearman. One of these commenters noted that
issuers often include a discussion of repurchase activity in their
MD&A section. See letter from Quest.
    \252\ See, e.g., letters from Cravath and Profs. Lewis and
White.
    \253\ See letter from Chamber III (citing NIFLA v. Becerra, 138
S. Ct. 2361, 2372 (2018)).
    \254\ See letter from Chamber III (citing Am. Meat Inst. v.
USDA, 760 F.3d 18, 34 (D.C. Cir. 2014)).
---------------------------------------------------------------------------

    In contrast, other commenters suggested that the Commission require
more disclosure than was proposed.\255\ A few of these commenters
recommended that issuers be required to announce all of their share
repurchase plans \256\ in a standardized format \257\ or on Form 8-
K.\258\ A number of commenters stated that the final amendments should
require issuers to disclose the manner in which they are funding their
share repurchases \259\ out of the concern that some issuers may borrow
funds to finance those transactions.\260\ One commenter asserted that
the final amendments should require a five-year lookback to compare the
average price per repurchased share against the price per share
received pursuant to new issuances and stock compensation plans.\261\
Some commenters recommended disclosure about the impact of share
repurchases on performance targets,\262\ and other commenters suggested
that we adopt amendments requiring issuers to disclose whether they
considered other uses for the funds being used for the share
repurchases.\263\
---------------------------------------------------------------------------

    \255\ See, e.g., letters from AFREF et al., Better Markets I,
BrilLiquid, CalPERS, CFA Institute, Form Letter A, ICGN, Prof.
Palladino, Roosevelt, and Senators Rubio & Baldwin.
    \256\ See, e.g., letters from BrilLiquid, CalPERS, CFA
Institute, ICGN, and Prof. Palladino.
    \257\ See letter from CalPERS.
    \258\ See, e.g., letters from BrilLiquid and ICGN.
    \259\ See, e.g., letters from AFREF et al., Better Markets I,
CalPERS, CFA Institute, Form Letter A, Prof. Palladino, Roosevelt,
and Senators Rubio & Baldwin.
    \260\ See, e.g., letters from AFREF et al., CalPERS, CFA
Institute, Form Letter A, Prof. Palladino, and Senators Rubio &
Baldwin.
    \261\ See letter from CFA Institute.
    \262\ See, e.g., letters from CFA Institute and CII.
    \263\ See, e.g., letters from CFA Institute and Form Letter A.
---------------------------------------------------------------------------

b. Comments on Policies and Procedures Relating to Purchases and Sales
of the Issuer's Securities by Its Officers and Directors During a
Repurchase Program
    A number of commenters supported the proposal to require issuers to
disclose any policies and procedures relating to purchases and sales of
the issuer's securities by its officers and directors during a
repurchase program, including any restriction on such
transactions.\264\ Some commenters recommended that the Commission
adopt a more comprehensive requirement than was proposed.\265\ A few of
these commenters asked the Commission to prohibit corporate insider
trading before, during, and after buyback announcements and
execution.\266\ One commenter recommended requiring disclosure of any
directors, officers, and ten percent

shareholders who purchased or sold shares within ten days of an
issuer's buyback program announcement.\267\
---------------------------------------------------------------------------

    \264\ See, e.g., letters from CII and CFA Institute.
    \265\ See, e.g., letters from AFREF et al., Better Markets I,
CII, Oxfam, Prof. Palladino, and Public Citizen.
    \266\ See, e.g., letters from AFREF et al., Better Markets I,
Oxfam, Prof. Palladino, and Public Citizen.
    \267\ See letter from CII.
---------------------------------------------------------------------------

    A few commenters, however, opposed this proposal.\268\ One of these
commenters \269\ suggested that this information would be more
appropriate in 17 CFR 229.407 (``Item 407 of Regulation S-K''), which
contains disclosure requirements regarding corporate governance.
Another commenter asserted that the proposed disclosure could create
the erroneous expectation that an issuer must have such policies and
procedures when it may not have them.\270\ One commenter suggested that
this requirement would effectively ban such insider sales.\271\
---------------------------------------------------------------------------

    \268\ See, e.g., letters from ABA Committee and PNC.
    \269\ See letter from ABA Committee.
    \270\ See letter from PNC.
    \271\ See letter from Maryland Bar.
---------------------------------------------------------------------------

c. Comments on Checkbox Requirement
    Several commenters supported the proposed requirement for issuers
to disclose if any of their officers or directors subject to the
reporting requirements under section 16(a) of the Exchange Act
purchased or sold shares or other units of the class of the issuer's
equity securities that is the subject of an issuer share repurchase
plan or program within ten business days before or after the
announcement of an issuer purchase plan or program by checking a box
before the tabular disclosure of issuer purchases of equity
securities.\272\ Several of these commenters specifically supported
including the ten business-day period.\273\ One commenter noted that
the proposal ``would allow investors to more fully understand how
officer and director stock purchase and sale activities interrelate
with an issuer's share repurchase program.'' \274\ Another commenter
stated that the checkbox ``would allow investors to determine whether
corporate insiders are potentially benefiting unfairly from knowledge
asymmetry by, for example, purchasing shares ahead of an issuer's
repurchase plan announcement, knowing that share prices usually rise
with such an announcement.'' \275\
---------------------------------------------------------------------------

    \272\ See, e.g., letters from Better Markets I, CFA Institute,
Hecht, and ICGN. One of these commenters suggested expanding the
checkbox period to 30 days before and after adoption of a repurchase
plan because ``[i]nsiders will know well before the announcement
that the company is considering a stock repurchase program.'' See
letter from Hecht.
    \273\ See, e.g., letters from Better Markets I, CFA Institute,
and ICGN. See also letter from Hecht (supporting a 30-day period).
    \274\ See letter from CFA Institute.
    \275\ See letter from Better Markets I.
---------------------------------------------------------------------------

    Other commenters, however, opposed the proposal.\276\ Most of the
commenters opposed to the proposal indicated that the proposed checkbox
requirement would be unnecessary \277\ because it would be duplicative
of the required disclosures in Exchange Act section 16,\278\ and
because trading on material nonpublic information is already
prohibited.\279\ Similarly, one commenter stated that insider
transactions occurring after a repurchase plan announcement should be
excluded from the checkbox requirement because the information is
already public.\280\ Another commenter stated that, if Form SR is
adopted, the data from that form should suffice.\281\ One commenter
asserted it opposed the proposal because insiders do not have access to
any particular repurchase information that would give them a trading
advantage.\282\ Some commenters noted that FPIs would be effectively
excluded from the checkbox requirement because they are exempt from
Exchange Act section 16 reporting.\283\
---------------------------------------------------------------------------

    \276\ See, e.g., letters from ABA Committee, BrilLiquid, Chamber
II, Cravath, DLA Piper, HP, Quest, and Simpson Thacher.
    \277\ See, e.g., letters from ABA Committee, BrilLiquid, Chamber
II, Cravath, DLA Piper, Quest, and Simpson Thacher.
    \278\ See, e.g., letters from ABA Committee, DLA Piper, and
Simpson Thacher.
    \279\ See letter from Quest.
    \280\ See letter from DLA Piper.
    \281\ See letter from Cravath.
    \282\ See letter from HP.
    \283\ See, e.g., letters from CBA and Cravath.
---------------------------------------------------------------------------

    Several commenters expressed concern about the potential for
misinterpretations as a result of the checkbox.\284\ One commenter
claimed that the checkbox requirement could incorrectly imply that
trading outside the checkbox window is always permissible.\285\ Another
commenter stated that the checkbox could cause investors to assume
incorrectly that the issuer engaged in inappropriate behavior.\286\
Some commenters indicated that the checkbox requirement could give the
incorrect impression that insiders were trading securities as a result
of the issuer's repurchase announcement instead of for other reasons,
such as long-established Rule 10b5-1(c) plans \287\ or automatic sales
to fund tax withholding on share vesting.\288\
---------------------------------------------------------------------------

    \284\ See, e.g., letters from ABA Committee, Chamber II,
Cravath, Quest, and Vistra.
    \285\ See letter from Cravath.
    \286\ See letter from Chamber II (stating that ``any positive
correlation between share repurchases and insider selling is likely
driven by blackout periods and not opportunistic insider trading
around repurchases.'' But see letter from Prof. Jackson, Dr. Hu, and
Dr. Zytnick (refuting that commenter's analysis by providing their
own analysis showing that, even after controlling for blackout
periods, insider sales are significantly higher during
repurchases.).
    \287\ See, e.g., letters from Cravath, DLA Piper, and PNC.
    \288\ See letter from PNC.
---------------------------------------------------------------------------

    Some commenters asserted that Rule 10b5-1(c) plan transactions or
automatic sales to fund tax withholding on share vesting should be
excluded from the checkbox requirement.\289\ One commenter asked that
the Commission state that ``officers and directors trading in a
company's securities at the same time that the company is buying back
its own securities is not in violation [of] any rule or otherwise
harmful.'' \290\ Another commenter stated that insider purchases or
sales should be included in the checkbox requirement only if an
issuer's repurchase plan is publicly announced and implemented.\291\ A
different commenter recommended that the Commission permit issuers to
include context for the checkbox so that trading activities are not
misconstrued.\292\
---------------------------------------------------------------------------

    \289\ See, e.g., letters from Cravath, DLA Piper, and PNC.
    \290\ See letter from Quest.
    \291\ See letter from Cravath (``We also do not believe that a
checkbox requirement is appropriate in the context of repurchase
plans that are not publicly announced.'').
    \292\ See letter from ABA Committee.
---------------------------------------------------------------------------

    Finally, one commenter asked the Commission to clarify how the
checkbox would apply to issuers with multiple classes of stock, each
with its own repurchase plan; whether announcing the increase of an
existing share repurchase plan would constitute the announcement of a
new repurchase plan for purposes of the requirement; and whether an
issuer may rely on Forms 3,\293\ 4,\294\ and 5 \295\ filed with the
Commission to determine whether it should check the box.\296\
---------------------------------------------------------------------------

    \293\ 17 CFR 249.103.
    \294\ 17 CFR 249.104.
    \295\ 17 CFR 249.105.
    \296\ See letter from ABA Committee.
---------------------------------------------------------------------------

3. Final Amendments
    We are adopting final amendments relating to the revision and
expansion of the disclosure requirements in Item 703 of Regulation S-K,
Form 20-F, and Form N-CSR, with some modifications from the proposal in
response to comments received. Consistent with the proposed amendments,
these final amendments work in conjunction with the new periodic
quantitative repurchase disclosures to provide investors with more
detailed information to evaluate an issuer's share repurchases. We
continue to believe that these disclosures will help investors evaluate
whether the issuer is engaged

in efficient repurchases. Specifically, the final amendments require an
issuer to disclose:
     The objectives or rationales for each repurchase plan or
program and process or criteria used to determine the amount of
repurchases; \297\
---------------------------------------------------------------------------

    \297\ In a clarifying change from the proposal, the final
amendments will require disclosure of the ``objectives or
rationales'' rather than the ``objective or rationale'' for each
repurchase plan or program to make clear that the disclosure is not
limited to one objective or rationale if an issuer has more than
one.
---------------------------------------------------------------------------

     Any policies and procedures relating to purchases and
sales of its securities by its officers and directors during a
repurchase program, including any restriction on such transactions; and
     Whether any of its directors and officers subject to the
reporting requirements under Exchange Act section 16(a) (for domestic
corporate issuers and Listed Closed-End Funds), or directors or senior
management that would be identified pursuant to Item 1 of Form 20-F
(for FPIs, whether filing on the forms exclusively available to FPIs or
on the domestic forms) purchased or sold shares or other units of the
class of the issuer's equity securities that are registered pursuant to
section 12 of the Exchange Act and subject of a publicly announced
repurchase plan or program within four business days before or after
the issuer's announcement of such repurchase plan or program or the
announcement of an increase of an existing share repurchase plan or
program by checking a box before the tabular disclosure of issuer
purchases of equity securities.\298\
---------------------------------------------------------------------------

    \298\ As noted above, while we are not adopting the proposed
requirement to provide narrative disclosure under Item 703 regarding
trades intended to qualify for the non-exclusive safe harbor of
Rules 10b-18 or the affirmative defense under Rule 10b5-1(c), we are
requiring substantially the same information be disclosed in tabular
fashion in other registrant filings. See supra notes 229-230 and
accompanying text.
---------------------------------------------------------------------------

    Additionally, the final amendments require disclosure of the number
of shares (or units) purchased other than through a publicly announced
plan or program, and the nature of the transaction (e.g., whether the
purchases were made in open-market transactions, tender offers, in
satisfaction of the issuer's obligations upon exercise of outstanding
put options issued by the issuer, or other transactions), and certain
disclosures for publicly announced repurchase plans or programs,
including:
     The date each plan or program was announced;
     The dollar amount (or share or unit amount) approved;
     The expiration date (if any) of each plan or program;
     Each plan or program that has expired during the period
covered by the table; and
     Each plan or program the issuer has determined to
terminate prior to expiration, or under which the issuer does not
intend to make further purchases.
    This same information is already required to be disclosed in our
current rules. In current Item 703, this information is required in a
footnote to the monthly quantitative share repurchase disclosure table.
The final amendments do not change the substance of these requirements.
The only change is that the final amendments change the form of the
requirements from an instruction to the main text of Item 703 and no
longer require the disclosure to be part of a footnote to the monthly
table, as the monthly table will no longer exist. Instead this
disclosure will be required in the main text of the narrative
discussion. We note that some commenters suggested that the final
amendments should include a number of additional, more prescriptive
disclosure requirements relating to the new narrative requirements that
are being added to Item 703, Form 20-F, and Form N-CSR.\299\ The
disclosure we are adopting will provide the information necessary for
investors to evaluate the efficiency of issuer repurchases and their
impact on the market, and we do not believe that the particular
individual disclosures suggested by commenters are needed. To the
extent further material information is necessary to make such
disclosures not misleading, the issuer will be required to provide that
information under existing Rule 12b-20.\300\
---------------------------------------------------------------------------

    \299\ Some commenters suggested particular additional
disclosures such as a five-year lookback, see letter from CFA
Institute, the impact of share repurchases on performance targets,
see letters from CFA Institute and CII, or alternative uses for the
share repurchase funds, see letter from CFA Institute and Form
Letter A.
    \300\ See Rule 12b-20 (``In addition to the information
expressly required to be included in a statement or report, there
shall be added such further material information, if any, as may be
necessary to make the required statements, in the light of the
circumstances under which they are made not misleading.'').
---------------------------------------------------------------------------

    Other commenters suggested that certain aspects of the disclosure
requirements in new Item 703(a) \301\ should not be adopted because
they could result in misleading information. We disagree. We believe
that the required narrative disclosures in the final amendments provide
the information necessary for investors to understand and evaluate an
issuer's share repurchases in a clear and concise manner. For example,
the checkbox requirement will assist investors in identifying issuers
where there is a possibility that repurchases affected the value of
executive compensation, permitting investors to further investigate
whether this possibility should affect their assessment of the
repurchase.\302\ If an issuer believes any of the required disclosures
would result in misleading or confusing information, the issuer may
provide additional disclosure to put the required information in
context. Additionally, as with all of our required disclosures, under
our rules issuers are required to provide any additional information
necessary to make the required disclosure not misleading.\303\
Moreover, issuers are not foreclosed from discussing their repurchases
in other sections of the document, such as in the MD&A section or in
the corporate governance section required by Item 407 of Regulation S-
K.
---------------------------------------------------------------------------

    \301\ The information required in new Item 703(a) would have
been required in proposed Item 703(c). We made this change in the
final amendments because we are requiring the tabular disclosure of
the daily quantitative repurchase data in new Item 601(b)(26)
instead of proposed Item 703(a) and (b). See infra Section III.A.3.
    \302\ In response to the commenter who suggested we should
exclude from this disclosure automatic sales to fund certain tax
withholding ``to avoid the risk that the checked box would be
provocative despite the fact that the underlying transaction would
only reflect a decision made, in most cases, a year or more prior to
the sale and a decision not typically made by the officer or
director personally,'' we note that in such a circumstance, the
issuer could provide additional disclosure as context for the
required disclosure, which may avoid the concern raised by the
commenter. See letter from PNC.
    \303\ See Rule 12b-20.
---------------------------------------------------------------------------

    Some commenters stated that they opposed the requirement in
proposed Item 703(a)(1) to disclose the objective or rationale for an
issuer's share repurchases and process or criteria used to determine
the amount of repurchases because this requirement would result in the
exposure of competitive or sensitive information.\304\ One commenter
asked the Commission to clarify that the final amendments are not
intended to require an issuer to disclose such information.\305\
Although the disclosures required by the final amendments should convey
a thorough understanding of the issuer's objectives or rationales for
the repurchases, and the process or criteria it used in determining the
amount of the repurchase, the final amendments do not require issuers
to provide disclosure at a level of granularity that would

reveal any competitive or sensitive information beyond what may already
be gleaned from other disclosures regarding the business and financial
condition of the issuer.
---------------------------------------------------------------------------

    \304\ See, e.g., letters from BPI & Amer. Bankers Assoc., PNC,
Profs. Lewis and White, Shearman, SIFMA II, and SCG.
    \305\ See letter from PNC.
---------------------------------------------------------------------------

    Other commenters opposed this requirement because, they asserted,
it would result in boilerplate disclosure.\306\ We disagree and note
that the narrative disclosure, in conjunction with the new periodic
quantitative repurchase disclosures, must provide investors with
sufficiently detailed information to evaluate an issuer's share
repurchases. The narrative disclosure also should be appropriately
tailored to an issuer's particular facts and circumstances.
---------------------------------------------------------------------------

    \306\ See, e.g., letters from Chamber II, Coalition, Cravath,
Jones Day, Morris, NAM, and Sullivan. We note, however, that one
commenter asserted that, even if the final amendments lead to
boilerplate disclosures, the disclosure would still benefit
investors because it would provide investors with more information
than they have currently, it could become a point of engagement, and
shareholders would be able to inquire about allocation decisions or
provide support for the repurchase. See letter from ICGN.
---------------------------------------------------------------------------

    We expect issuers to provide the required disclosure without
relying on boilerplate language, and we received several helpful
suggestions from commenters in that regard.\307\ Although not an
exclusive or exhaustive list, commenters suggested that issuers could
avoid boilerplate language by discussing other possible ways to use the
funds allocated for the repurchase \308\ and comparing the repurchase
with other investment opportunities that would ordinarily be considered
by the issuer, such as capital expenditures and other uses of
capital.\309\ Issuers could also discuss the expected impact of the
repurchases on the value of remaining shares.\310\ Moreover, in
connection with their disclosure of the objectives or rationales for a
repurchase, issuers could discuss the factors driving the repurchase,
including whether their stock is undervalued, prospective internal
growth opportunities are economically viable, or the valuation for
potential targets is attractive.\311\ Issuers might additionally
discuss the sources of funding for the repurchase, where material, such
as, for example, in the case where the source of funding results in tax
advantages that would not otherwise be available for a repurchase.
---------------------------------------------------------------------------

    \307\ See, e.g., letters from AFREF et al., CFA Institute, CII,
Hecht, Prof. Palladino, Roosevelt, and Senators Rubio & Baldwin.
    \308\ See, e.g., letters from AFREF et al. and Senators Rubio &
Baldwin.
    \309\ See letter from Senators Rubio & Baldwin.
    \310\ See, e.g., letters from Prof. Palladino and Roosevelt.
    \311\ See letter from CII.
---------------------------------------------------------------------------

    We disagree with the commenter who asserted that the amendments
would violate the First Amendment on the grounds that the required
disclosures call for controversial opinions, not ``purely factual''
information.\312\ As we have explained, there are a number of reasons
why issuers undertake share repurchases, and an issuer's purpose in
undertaking a particular repurchase is significant information that can
aid investors in assessing the repurchase, including its purposes and
impacts on the firm and the issuer's value. The requirement that an
issuer disclose the objectives or rationales behind a repurchase can be
directly informative for investors and provide investors with the
proper context to understand the daily quantitative repurchase
disclosures (such as by allowing investors to confirm that the daily
pattern of trades is consistent with the issuer's stated purpose for
those repurchases) and to monitor and evaluate the issuer's share
repurchase and its effects on the issuer's securities. This requirement
thus involves disclosure that is factual in nature, advances important
interests as discussed throughout this release, and complies with the
First Amendment.
---------------------------------------------------------------------------

    \312\ See letter from Chamber III.
---------------------------------------------------------------------------

    We also disagree with the commenter who suggested that the
requirement to disclose the issuer's policies and procedures relating
to purchases and sales of its securities by its officers and directors
during a repurchase program would effectively ban such insider
sales.\313\ Disclosure of any such policies may aid investors in
determining the extent to which executive's interests may have, at
least in part, helped motivate repurchases. This is a disclosure
obligation that will provide investors with additional relevant
disclosures about issuer repurchases and not a requirement for an
issuer to have, adopt, or change any such policies and procedures.
---------------------------------------------------------------------------

    \313\ See letter from Maryland Bar.
---------------------------------------------------------------------------

    In a modification from the Proposed Rule, we are requiring that
issuers indicate by checkbox that covered executives have engaged in
equity transactions within four business days of a repurchase
announcement, rather than the ten business days proposed. While the
checkbox is intended to assist investors in identifying transactions
that warrant closer scrutiny, a larger window of time may potentially
result in added attention for a number of transactions that are not as
significant, reducing the value of the checkbox.\314\
---------------------------------------------------------------------------

    \314\ Cf. Rule 10b5-1 Adopting Release, supra note 18, at 80390
(reducing the disclosure window for tabular reporting of option
awards pursuant to Item 402(x) of Regulation S-K (17 CFR 229.402(x))
to address concerns about the potential disclosure of many routine
option awards that are less likely to have been affected by material
nonpublic information).
---------------------------------------------------------------------------

    We disagree with the commenter who stated that we should not impose
a checkbox requirement for transactions close in time to a repurchase
announcement because, the commenter asserted, such sales are only
coincidences of the corporate calendar and thus cannot represent
efforts by managers to profit from repurchases.\315\ As discussed
above, and as noted by other commenters, the predictability of the
corporate calendar may instead facilitate executive efforts to benefit
personally from repurchases, and thus we continue to believe the
checkbox is appropriate.\316\ For similar reasons, we disagree with the
commenter who stated that the checkbox is not needed in the case of an
executive whose trades would qualify for the affirmative defense under
Rule 10b5-1, because such trades could not reflect nonpublic
information,\317\ and the commenter that stated that the checkbox
requirement should apply only to repurchase plans that are publicly
announced and implemented.\318\ Because repurchases often occur at
relatively predictable times in the corporate calendar, executives can
schedule trades in advance to potentially benefit from those
repurchases that do occur at such times.\319\
---------------------------------------------------------------------------

    \315\ See letter from Chamber II.
    \316\ See letters from Prof. Edmans and Prof. Jackson, Dr. Hu,
and Dr. Zytnick.
    \317\ See letter from DLA Piper.
    \318\ See letter from Cravath (``We also do not believe that a
checkbox requirement is appropriate in the context of repurchase
plans that are not publicly announced.'').
    \319\ See letters from Prof. Edmans and Prof. Jackson, Dr. Hu,
and Dr. Zytnick.
---------------------------------------------------------------------------

    Several commenters who opposed the proposed checkbox requirement
asserted that the requirement is unnecessary,\320\ as it duplicates the
existing Exchange Act section 16 disclosures for issuers that file on
domestic forms.\321\ While the checkbox does provide information
available in other disclosures, we believe that it would still be
helpful to investors. The checkbox eliminates the need for investors to
review Exchange Act section 16(a) filings to determine if any

officer or director has purchased or sold equity securities that are
the subject of an issuer's share repurchase plan or program around the
time of the announcement. Thus, while the relevant data about domestic
issuers are available from other sources, the checkbox allows investors
to focus their efforts on transactions that are the most likely to
benefit from further analysis. Absent the checkbox, identifying the
subset of filings presenting executive equity transactions close in
time to a repurchase announcement would require an investor to manually
cross-check numerous filings. Moreover, this information is necessary
for investors in FPIs because Exchange Act section 16(a) does not apply
to them.
---------------------------------------------------------------------------

    \320\ See, e.g., letters from ABA Committee, BrilLiquid, Chamber
II, Cravath, DLA Piper, Quest, and Simpson Thacher.
    \321\ See, e.g., letters from ABA Committee, DLA Piper, and
Simpson Thacher.
---------------------------------------------------------------------------

    In this regard, in the Proposing Release, the Commission drew no
distinction between domestic issuers and FPIs with respect to the
importance of disclosure regarding insider purchases and sales within
ten business days before or after the announcement of an issuer
repurchase plan or program. However, in applying the same proposed
regulatory text to Form 20-F as to Item 703 of Regulation S-K and Form
N-CSR, which referenced Exchange Act section 16 reporting, the proposed
checkbox amendments to Form 20-F, as drafted, would not have resulted
in any additional disclosures about insiders at FPIs because FPI
securities are exempt from Exchange Act section 16 reporting.\322\ We
appreciate the comments that noted this issue.\323\
---------------------------------------------------------------------------

    \322\ See 17 CFR 240.3a12-3.
    \323\ See, e.g., letters from CBA and Cravath.
---------------------------------------------------------------------------

    We continue to believe this information is as important for
investors in FPIs as it is for investors in other issuers. Consistent
with the way in which executive officers and directors are referenced
in Form 20-F, the checkbox disclosure requirement will now refer to
purchases and sales by any ``director [and] member of senior management
who would be identified pursuant to Item 1 of Form 20-F'' instead of
referencing officers and directors subject to the reporting
requirements under section 16(a) of the Exchange Act. In addition, we
are moving the checkbox from Form 20-F to Form F-SR because we believe
the checkbox is most useful in conjunction with the daily quantitative
repurchase disclosures, which we moved to Form F-SR for FPIs that file
on the FPI forms. Therefore, FPIs will be required to check the box if
an director or member of senior management who would be identified in
Form 20-F pursuant to Item 1 purchased or sold shares or other units of
the class of the issuer's equity securities that is the subject of an
issuer share repurchase plan or program within four business days
before or after the issuer's announcement of such repurchase plan or
program. Because FPIs may elect to report using Forms 10-Q and 10-K,
for those issuers the checkbox on those forms will include the Form 20-
F reference to directors or senior management.
    Other commenters opposed the proposed checkbox requirement because
of the potential for misinterpretations or mischaracterizations,\324\
including that it could give the incorrect impression that insiders
were trading securities because of the announcement instead of for
other reasons, such as long-established Rule 10b5-1(c) plans \325\ or
automatic sales to fund tax withholding on share vesting.\326\ To
remedy any misunderstandings, some commenters suggested that the
Commission should make certain acknowledgments \327\ or that the final
amendments should allow issuers to include context for the checkbox to
avoid any miscomprehension.\328\ We did not revise the final amendments
in response to these comments because, in addition to the required
disclosure of factual information, an issuer may include additional
disclosure to provide context to investors, and would be required to do
so if such additional disclosures are material and necessary to prevent
the required disclosures from being misleading.\329\ In response to a
commenter's suggestions,\330\ we are adopting amendments to clarify
certain aspects of the checkbox requirement. If an issuer has multiple
classes of stock, each with its own repurchase plan, the issuer is
required to check the box in its periodic report if, during that
period, a covered officer or director purchases or sells shares or
other units of the class of the issuer's equity securities that is the
subject of any issuer share repurchase plan or program within four
business days before or after the issuer's announcement of such
repurchase plan or program. Additionally, the issuer is required to
check the box in its periodic report if, during that period, it
announced an increase of an existing share repurchase plan because the
announcement constitutes a new repurchase plan for purposes of the
requirement.
---------------------------------------------------------------------------

    \324\ See, e.g., letters from ABA Committee, Chamber II,
Cravath, Quest, and Vistra.
    \325\ See, e.g., letters from Cravath, DLA Piper, and PNC.
    \326\ See letter from PNC.
    \327\ See, e.g., letters from Cravath, DLA Piper, PNC, and
Quest.
    \328\ See letter from ABA Committee.
    \329\ See Rule 12b-20.
    \330\ See letter from ABA Committee.
---------------------------------------------------------------------------

    Finally, in response to a commenter's request for
clarification,\331\ we note that a domestic corporate issuer may rely
on Forms 3, 4, and 5 filed with the Commission in determining if it
should check the box provided that the reliance is reasonable. For
example, an issuer would not be able to rely on those forms if the
issuer knows or has reason to believe that a form was filed
inappropriately or that a form should have been filed but was not. The
amendments include a provision in new Item 601(b)(26) and new Item
14(a)(iii) in Form N-CSR that permits an issuer to rely on Forms 3, 4,
and 5 in determining whether to check the box. Form F-SR contains an
analogous provision for FPIs. Because the securities of FPIs are exempt
from section 16,\332\ however, Item 601(b)(26) and Form F-SR permit an
FPI to rely on written representations from its directors and senior
management provided that the reliance is reasonable.
---------------------------------------------------------------------------

    \331\ See id.
    \332\ See 17 CFR 240.3a12-3.
---------------------------------------------------------------------------

C. Clarifying Amendments

1. Proposed Amendments
    In the Proposing Release, the Commission proposed clarifying
amendments to Item 703 of Regulation S-K, Form 20-F, and Form N-CSR to
simplify application of the rules and remove unnecessary instructions.
Specifically, the Commission proposed:
     To relocate guidance in the Instruction 1 to paragraph
(b)(1) about information to appear in the table and disclosure to
appear in a footnote to the table to paragraph (b)(1) to a new
paragraph (c);
     To consistently refer to ``issuer'' instead of
``company''; \333\
---------------------------------------------------------------------------

    \333\ In Form N-CSR only we would continue to refer to
``registrants'' rather than ``issuer'' or ``company'' for
consistency with other provisions in Form N-CSR.
---------------------------------------------------------------------------

     To remove Instructions 1 and 2 in the Instructions to
paragraphs (b)(3) and (b)(4) and effectuate those instructions by
adding ``aggregate'' to the total number of shares for all plans or
programs publicly announced in paragraph (b)(3) in lieu of Instruction
1 and adding proposed paragraph (c) to replace Instruction 2; and
     To delete the Instruction to the affected requirements as
they are clear that all purchases, including those that do not satisfy
the conditions of Rule 10b-18, are included.

2. Comments on the Proposed Amendments
    We did not receive any comments on these proposed clarifying
amendments.
3. Final Amendments
    We are adopting the clarifying amendments as proposed except that
the reference to new proposed Item 703(c) is now new final Item 703(a).

D. New Item 408(d)

1. Proposed Amendments
    In January 2022, the Commission proposed amendments concerning Rule
10b5-1 and insider trading.\334\ Among other matters, the Commission
proposed new disclosure requirements regarding the adoption,
modification, and termination of Rule 10b5-1 plans and certain other
similar trading arrangements by issuers, directors, and officers.
Specifically, the Commission proposed new Item 408(a) of Regulation S-K
to require certain issuers \335\ to disclose:
---------------------------------------------------------------------------

    \334\ See Rule 10b5-1 Proposing Release, supra note 17.
    \335\ The proposed Item 408(a) of Regulation S-K disclosure
would not apply to registered investment companies or asset-backed
issuers (as defined in 17 CFR 229.1101). See 10b5-1 Adopting
Release, supra note 18, at 80409 note 481.
---------------------------------------------------------------------------

     Whether, during its most recently completed fiscal quarter
(the issuer's fourth fiscal quarter in the case of an annual report),
the issuer adopted or terminated any contract, instruction, or written
plan to purchase or sell its securities, whether or not intended to
satisfy the affirmative defense conditions of Rule 10b5-1(c), and a
description of the material terms of the contract, instruction or
written plan, including:
    [cir] The date of adoption or termination;
    [cir] The duration of the contract, instruction, or written plan;
and
    [cir] The aggregate amount of securities to be sold or purchased
pursuant to the contract, instruction, or written plan.
    The Commission also proposed to require issuers to disclose similar
information regarding the use of such trading arrangements by its
directors and officers (as defined in 17 CFR 240.16a-1(f) (Rule 16a-
1(f))).
    Under the proposed rule, the disclosures would be required in Forms
10-Q and 10-K, as applicable, and tagged using Inline XBRL. Issuers
would be required to provide this information if, during the quarterly
period covered by the report, the issuer, or any director or officer
who is required to file reports under Exchange Act section 16,\336\
adopted or terminated a Rule 10b5-1 plan.
---------------------------------------------------------------------------

    \336\ 15 U.S.C. 78p.
---------------------------------------------------------------------------

    In December 2022,\337\ the Commission adopted certain aspects of
the Rule 10b5-1 Proposing Release, including the proposed disclosure
requirements with respect to the use of pre-planned trading
arrangements by an issuer's directors and officers. In response to
commenters, the Commission revised the final rule to exclude disclosure
of pricing information. At that time, the Commission did not adopt the
proposal to require corresponding disclosure regarding the use of such
trading arrangements by the issuer of the security. The Commission
noted that, in light of the various comments received on this aspect of
the proposal, further consideration of the potential application of the
disclosure requirement for purchases of equity securities by the issuer
was warranted.
---------------------------------------------------------------------------

    \337\ See Rule 10b5-1 Adopting Release, supra note 18.
---------------------------------------------------------------------------

2. Comments on the Proposed Amendments
    Several commenters on the Rule 10b5-1 Proposing Release \338\
supported, as a general matter, the proposed requirement for quarterly
reporting of Rule 10b5-1(c) and non-Rule 10b5-1(c) trading arrangements
because such disclosure could provide useful information to investors
and the markets.\339\ One commenter \340\ asserted that the proposed
disclosures would provide long-term shareholders with information that
completes the partial picture about trading by insiders provided by 17
CFR 239.144 (``Form 144'') and Exchange Act section 16 reports.\341\
Commenters were generally divided in their recommendations of what
trading arrangement information should be disclosed.\342\
---------------------------------------------------------------------------

    \338\ Comments on the Rule 10b5-1 Proposing Release can be found
at https://www.sec.gov/comments/s7-20-21/s72021.htm.
    \339\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Anthony O'Reilly (Mar. 30, 2022); Better
Markets (Apr. 1, 2022); Colorado Public Employees' Retirement
Association (Mar. 29, 2022); Council of Institutional Investors
(Mar. 24, 2022); DLA Piper (Apr. 1, 2022); International Corporate
Governance Network (Mar. 31, 2022); North American Securities
Administrators Association, Inc. (Apr. 1, 2022); and Simpson Thacher
& Bartlett LLP (Mar. 31, 2022).
    \340\ See letter in response to the Rule 10b5-1 Proposing
Release from Council of Institutional Investors (Mar. 24, 2022).
    \341\ Currently, with the exception of the Rule 10b5-1
representation included in Form 144, there are no disclosure
obligations regarding the use of Rule 10b5-1 trading arrangements.
See letter in response to the Rule 10b5-1 Proposing Release from
American Federation of Labor and Congress of Industrial
Organizations (Apr. 1, 2022).
    \342\ One commenter in response to the Rule 10b5-1 Proposing
Release stated that the final rule should not require disclosure of
the number of shares covered by a trading arrangement and the
duration of the arrangement. See letter in response to the Rule
10b5-1 Proposing Release from Quest Diagnostics Inc. (Apr. 1, 2022).
Some commenters recommended the required disclosures should be
limited to the person adopting the plan, the date of adoption or
termination, and duration. See, e.g., letters in response to the
Rule 10b5-1 Proposing Release from Fenwick & West (Mar. 31, 2022)
and Shearman & Sterling LLP (Apr. 1, 2022). Other commenters in
response to the Rule 10b5-1 Proposing Release recommended that the
Commission not require disclosure of the termination of a trading
arrangement because issuers may terminate a trading arrangement in
advance of announcement of a significant corporate transaction, such
as a merger, and that such plan terminations, if disclosed, could
signal the market. See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Sullivan & Cromwell LLP (Apr. 1, 2022) and
Securities Industry and Financial Markets Association, Kevin Carroll
(Apr. 1, 2022).
---------------------------------------------------------------------------

    Other commenters did not support the proposed reporting
requirements as a general matter.\343\ A number of commenters expressed
concern regarding the requirement for issuers to provide a description
of the ``material terms'' of any Rule 10b5-1 trading arrangement \344\
because issuers might interpret this to include specific details of a
trading arrangement, such as pricing information.\345\ Several
commenters stated that the disclosure of pricing information and other
details of a Rule 10b5-1 trading arrangement could expose issuers and
their insiders to strategic trades.\346\ A number of

commenters also recommended that the Commission not require disclosure
regarding non-Rule-10b5-1 trading arrangements \347\ because it would
not provide valuable information to investors, the Commission, or other
market participants.\348\ Moreover, one commenter suggested the
Commission exempt SRCs from the proposed disclosure requirement.\349\
---------------------------------------------------------------------------

    \343\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from ACCO Brands Corp. (Mar. 31, 2022); Committee
on Securities Law of the of the Business Law Section of the Maryland
State Bar (Apr., 2022); International Bancshares Corporation (Apr.
1, 2022); National Association of Manufacturers (Apr. 1, 2022);
National Venture Capital Association (Apr. 1, 2022); Society for
Corporate Governance (Apr. 1, 2022); Sullivan & Cromwell LLP (Apr.
1, 2022); and Wilson, Sonsini, Goodrich & Rosati (Apr. 11, 2022).
    \344\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Cleary, Gottlieb, Steen & Hamilton LLP (Mar.
23, 2022); Davis Polk & Wardwell LLP (Mar. 28, 2022); DLA Piper
(Apr. 1, 2022); Federal Regulation of Securities Committee of the
Business Law Section of the American Bar Association (Apr. 29,
2022); FedEx Corporation (Apr. 1, 2022); Fenwick & West (Mar. 31,
2022); Kirkland & Ellis (Apr. 1, 2022); National Association of
Manufacturers (Apr. 1, 2022); National Venture Capital Association
(Apr. 1, 2022); Quest Diagnostics Inc. (Apr. 1, 2022); Securities
Industry and Financial Markets Association, Joseph P. Corcoran (Apr.
1, 2022); Society for Corporate Governance (Apr. 1, 2022); Sullivan
& Cromwell LLP (Apr. 1, 2022); and Wilson, Sonsini, Goodrich &
Rosati (Apr. 11, 2022).
    \345\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Cleary, Gottlieb, Steen & Hamilton LLP (Mar.
23, 2022); Davis Polk & Wardwell LLP (Mar. 28, 2022); DLA Piper
(Apr. 1, 2022); Federal Regulation of Securities Committee of the
Business Law Section of the American Bar Association (Apr. 29,
2022); Fenwick & West (Mar. 31, 2022); Quest Diagnostics Inc. (Apr.
1, 2022); Securities Industry and Financial Markets Association,
Joseph P. Corcoran (Apr. 1, 2022); Society for Corporate Governance
(Apr. 1, 2022); and Wilson, Sonsini, Goodrich & Rosati (Apr. 11,
2022).
    \346\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Davis Polk & Wardwell LLP (Mar. 28, 2022);
DLA Piper (Apr. 1, 2022); Fenwick & West (Mar. 31, 2022); National
Venture Capital Association (Apr. 1, 2022); Securities Industry and
Financial Markets Association, Joseph P. Corcoran (Apr. 1, 2022);
Society for Corporate Governance (Apr. 1, 2022); and Wilson,
Sonsini, Goodrich & Rosati (Apr. 11, 2022).
    \347\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Cleary, Gottlieb, Steen & Hamilton LLP (Mar.
23, 2022); Shearman & Sterling LLP (Apr. 1, 2022); Simpson Thacher &
Bartlett LLP (Mar. 31, 2022); and Sullivan & Cromwell LLP (Apr. 1,
2022).
    \348\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Cleary, Gottlieb, Steen & Hamilton LLP (Mar.
23, 2022); Cravath, Swaine & Moore LLP (Mar. 28, 2022); and Simpson
Thacher & Bartlett LLP (Mar. 31, 2022).
    \349\ See letter in response to the Rule 10b5-1 Proposing
Release from Maryland Bar (claiming that SRCs and their insiders are
less likely to engage in the kinds of trading in the securities of
their companies that would cause concern, but these issuers could be
disproportionately impacted by the reporting burden).
---------------------------------------------------------------------------

    A few commenters to the Rule 10b5-1 Proposing Release recommended
that the disclosure requirements regarding issuer trading arrangements
be considered in the context of this rulemaking.\350\ One of these
commenters suggested specifically that information relating to issuer
use of Rule 10b5-1 plans could be moved to Item 703 to consolidate
issuer reporting of share repurchases.\351\
---------------------------------------------------------------------------

    \350\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Cravath, Swaine & Moore LLP (Mar. 31, 2022)
and Simpson Thacher & Bartlett LLP (Mar. 31, 2022).
    \351\ See letter in response to the Rule 10b5-1 Proposing
Release from Simpson Thacher & Bartlett LLP (Mar. 31, 2022.
---------------------------------------------------------------------------

3. Final Amendments
    Consistent with the Rule 10b5-1 Adopting Release,\352\ we are
adopting new Item 408(d) of Regulation S-K, to better allow investors,
the Commission, and other market participants to observe how issuers
use Rule 10b5-1 plans. The information also will add important context
for interpreting other disclosures, including the other disclosures we
are adopting in this release, which should help investors value the
issuer's shares and make more informed investment decisions. As noted
above, in the Rule 10b5-1 Adopting Release, the Commission stated that
further consideration of potential application of the disclosure
requirements for purchases of equity securities by the issuer was
warranted. Upon further consideration, and in response to issues raised
by commenters, we believe that the Item 408(a) disclosure that was
proposed for issuers in the Rule 10b5-1 Proposing Release will
complement the disclosures concerning issuer repurchases that we are
adopting in this release and allow investors to better evaluate issuer
repurchases. Therefore, we are adopting new Item 408(d) in this
release. New Item 408(d) substantially mirrors the proposed Item 408(a)
of Regulation S-K disclosure requirement with respect to the issuer's
adoption or termination of a contract, instruction, or written plan to
purchase or sell its own securities that is intended to satisfy the
affirmative defenses conditions of Rule 10b5-1(c).
---------------------------------------------------------------------------

    \352\ See Rule 10b5-1 Adopting Release, supra note 18.
---------------------------------------------------------------------------

    In a change from the proposal, however, issuers will not be
required to disclose information about the adoption or termination of
any trading arrangement for the purchase or sale of securities of the
issuer that meets the requirements of a non-Rule 10b5-1 trading
arrangement as defined in Item 408(c). Because plans that would qualify
for the affirmative defense under Rule 10b5-1 offer issuers enhanced
protection from potential liability, in addition to other potential
benefits, and are considerably more flexible for issuers than for
insiders, we believe that issuers are incentivized to use trading
arrangements that satisfy the conditions of Rule 10b5-1(c).\353\ We
also agree with commenters who said that information about the issuer's
trading arrangements, other than those intended to qualify for the
affirmative defense, has more limited value to investors or other
market participants than information about such trading arrangements
for insiders.\354\ While issuers may not have reason to specifically
disclose their use of a 10b5-1 plan, we understand that issuers
generally have significant incentives to announce their repurchase
plans, so that mandating disclosure of non-10b5-1 plans would not
typically provide investors with significant new information.
---------------------------------------------------------------------------

    \353\ The issuer of a security that relies on the recently
amended Rule 10b5-1(c)(1) affirmative defense will not be subject to
a cooling-off period, any limitation on the use of multiple
overlapping plans, or any limitation on the use of single-trade
plans. See Rule 10b5-1(c)(1)(ii)(B), (D), and (E).
    \354\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Cleary, Gottlieb, Steen & Hamilton LLP (Mar.
23, 2022); Cravath, Swaine & Moore LLP (Mar. 28, 2022); and Simpson
Thacher & Bartlett LLP (Mar. 31, 2022).
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    New Item 408(d) will require an issuer to disclose whether, during
its most recently completed fiscal quarter (the issuer's fourth fiscal
quarter in the case of an annual report), the issuer adopted or
terminated a contract, instruction, or written plan to purchase or sell
its securities intended to satisfy the affirmative defense conditions
of Rule 10b5-1(c). Issuers are also required to provide a description
of the material terms of the contract, instruction, or written plan
(other than terms with respect to the price at which the party
executing the respective trading arrangement is authorized to trade),
such as:
     The date on which the registrant adopted or terminated the
Rule 10b5-1 trading arrangement;
     The duration of the Rule 10b5-1 trading arrangement; and
     The aggregate number of securities to be purchased or sold
pursuant to the Rule 10b5-1 trading arrangement.
    In response to comments and consistent with our approach to the
recently adopted Item 408(a) of Regulation S-K,\355\ we have revised
the final rule to clarify that new Item 408(d) does not require
disclosure of the price at which the party executing the trading
arrangement is authorized to trade. We agree with commenters that
disclosing pricing information could allow other persons to trade
strategically in anticipation of planned trades.\356\ As proposed,
issuers will be required to disclose this information in their
quarterly reports on Form 10-Q and Form 10-K (for the issuer's fourth
fiscal quarter), and tag the information using Inline XBRL.\357\
Moreover, while we are aware of the potential for a disproportionate
impact on SRCs, we believe that exempting them from this disclosure
requirement would deprive investors in those issuers of material
information about the use of Rule 10b5-1 plans.\358\
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    \355\ See Rule 10b5-1 Adopting Release, supra note 18.
    \356\ See, e.g., letters in response to the Rule 10b5-1
Proposing Release from Davis Polk & Wardwell LLP (Mar. 28, 2022);
DLA Piper (Apr. 1, 2022); Fenwick & West (Mar. 31, 2022); National
Venture Capital Association (Apr. 1, 2022); Securities Industry and
Financial Markets Association, Joseph P. Corcoran (Apr. 1, 2022);
Society for Corporate Governance (Apr. 1, 2022); and Wilson,
Sonsini, Goodrich & Rosati (Apr. 11, 2022).
    \357\ The Commission did not propose to require FPIs to provide
the Item 408(a) of Regulation S-K disclosure because they do not
file quarterly reports, but it requested comment on whether such a
requirement should apply to them. See Rule 10b5-1 Proposing Release,
supra note 17, at Question # 26. No comments were received on this
point.
    \358\ As proposed, see supra note 335, the final amendments do
not apply to asset-backed securities issuers. Therefore, for clarity
we are making a technical amendment to Instruction J of Form 10-K to
allow asset-backed securities issuers to omit Item 408 disclosures.
Instruction J of Form 10-K includes a list of Item requirements that
may be omitted for asset-backed securities issuers.

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    Although there may be some overlap in the disclosure provided
pursuant to new Item 408(d) and the disclosure provided pursuant to the
amendment to Item 703 of Regulation S-K about an issuer's Rule 10b5-
1(c) trading arrangements adopted during the prior fiscal quarter, new
Item 408(d) would complement the new Item 703 disclosure. The
disclosure requirement in Item 703 will be triggered only if an issuer
had conducted a share repurchase in the prior fiscal quarter. In
contrast, Item 408(d) will require disclosure if a Rule 10b5-1 plan was
adopted or terminated, regardless of whether a share repurchase
transaction pursuant to that plan actually occurred during the prior
fiscal quarter that is covered in the Form 10-Q or Form 10-K (for the
issuer's fourth fiscal quarter). To prevent potential duplicative
disclosures, we are adding a note to Item 408(d)(1), which states that,
if the disclosure provided pursuant to Item 703 contains disclosure
that would satisfy the requirements of Item 408(d)(1), a cross-
reference to that disclosure will satisfy the Item 408(d)(1)
requirements.

E. Structured Data Requirement

1. Proposed Amendments
    The Commission proposed to require issuers to tag the information
disclosed pursuant to Item 703 of Regulation S-K, Item 16E of Form 20-
F, Item 14 of Form N-CSR, and Form SR in a structured, machine-readable
data language. Specifically, under the proposed rules issuers would be
required to tag the disclosures in Inline XBRL in accordance with 17
CFR 232.405 (``Rule 405 of Regulation S-T'') and the EDGAR Filer
Manual.\359\ The proposed requirements would include detail tagging of
quantitative amounts disclosed within the tabular disclosures in each
of the aforementioned forms, as well as block text tagging and detail
tagging of narrative and quantitative information disclosed in the
footnotes to the tables required by Item 703 of Regulation S-K, Item
16E of Form 20-F, and Item 14 of Form N-CSR.
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    \359\ This tagging requirement would be implemented by including
cross-references to Rule 405 of Regulation S-T in each of the
repurchase disclosure provisions, and by revising Rule 405(b) of
Regulation S-T to include the proposed repurchase disclosures.
Pursuant to 17 CFR 232.301 (``Rule 301 of Regulation S-T''), the
EDGAR Filer Manual is incorporated by reference into the
Commission's rules. In conjunction with the EDGAR Filer Manual,
Regulation S-T governs the electronic submission of documents filed
with the Commission. Rule 405 of Regulation S-T specifically governs
the scope and manner of disclosure tagging requirements for
corporate issuers and investment companies, including the
requirement in Rule 405(a)(3) to use Inline XBRL as the specific
structured data language to use for tagging the disclosures.
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2. Comments on the Proposed Amendments
    Most of the commenters who discussed requiring issuers to tag the
information that would be disclosed in the proposed amendments
supported the requirement because they asserted that it would improve
the usability of the data.\360\ One commenter noted its concern that
the tagging requirement would be unnecessary and costly.\361\ Another
commenter objected to tagging the narrative disclosure and suggested
limiting the tagging requirement to quantitative repurchase
disclosures.\362\ One commenter asked the Commission to exempt FPIs
from this tagging requirement because their home country may not have a
similar requirement, so tagging would constitute an additional burden
on those issuers.\363\
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    \360\ See, e.g., letters from Better Markets I, CalPERS, CFA
Institute, CII, ICGN, NASAA, and XBRL US.
    \361\ See letter from NYC Bar.
    \362\ See letter from Cravath.
    \363\ See letter from VEUO (``FPIs may already be subject to
home country requirements with respect to disclosure of share
repurchases. Such home country requirements will almost certainly
not require preparation of structured data with the same content and
format as the Form SR Requirement. As a result, the structured data
requirement would represent an additional and unnecessary
administrative burden on FPIs'').
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3. Final Amendments
    We are adopting, as proposed, final amendments to require issuers
to tag the information disclosed pursuant to Items 601 and 703 of
Regulation S-K, Item 16E of Form 20-F, Item 14 of Form N-CSR, and Form
F-SR in a structured, machine-readable data language in accordance with
Rule 405 of Regulation S-T and the EDGAR Filer Manual. The final
amendments require detail tagging of the quantitative amounts disclosed
within the required tabular disclosures and block text tagging and
detail tagging of required narrative and quantitative information. As
certain commenters noted, requiring XBRL tagging in this manner would
``make the information provided most useful by making the data easier
to review and compare electronically'' \364\ and doing so ``would both
enhance the utility of the information for investors and lower their
costs to gather'' that information.\365\
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    \364\ See letter from CalPERS.
    \365\ See letter from CII.
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    We continue to believe that requiring Inline XBRL tagging of the
repurchase disclosures is beneficial because it makes them more readily
available and easily accessible to investors, market participants, and
others for aggregation, comparison, filtering, and other analysis, as
compared to requiring a non-machine readable data language such as
ASCII or HTML. This requirement also enables automated extraction and
analysis of granular data on actual repurchases, allowing investors and
other market participants to more efficiently perform large-scale
analysis and comparison of repurchases across issuers and time periods,
including comparing repurchases to information on executive's
compensation.\366\ At the same time, contrary to one commenter's
assertion that the Inline XBRL requirements would impose significant
unnecessary and significant compliance costs on issuers,\367\ we do not
expect the incremental compliance burden associated with tagging the
additional information to be unduly burdensome, because issuers subject
to the tagging requirements, including FPIs, are subject to similar
Inline XBRL requirements in other Commission filings.\368\ Moreover, as
a result of the tagging requirements, investors can aggregate or
manipulate the data to display monthly data that they are used to
reviewing.
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    \366\ These considerations are generally consistent with
objectives of the recently enacted Financial Data Transparency Act
of 2022, which directs the establishment by the Commission and other
financial regulators of data standards for collections of
information, including with respect to periodic and current reports
required to be filed or furnished under Exchange Act sections 13 and
15(d). Such data standards would need to meet specified criteria
relating to openness and machine-readability and promote
interoperability of financial regulatory data across members of the
Financial Stability Oversight Council. See James M. Inhofe National
Defense Authorization Act for Fiscal Year 2023, Public Law 117-263,
tit. LVIII, 136 Stat. 2395, 3421-39 (2022).
    \367\ See letter from NYC Bar.
    \368\ Inline XBRL requirements for Listed Closed-End Funds and
business development companies took effect beginning August 1, 2022
(for seasoned issuers) and February 1, 2023 (for all other issuers).
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F. Compliance Dates

    FPIs that file on the FPI forms will be required to comply with the
new disclosure and tagging requirements in new Form F-SR beginning with
the Form F-SR that covers the first full fiscal quarter that begins on
or after April 1, 2024. The Form 20-F narrative disclosure that relates
to the Form F-SR filings, which is required by Item 16E of that form,
and the related tagging requirements will be required starting in the
first Form 20-F filed after their first Form F-SR has been filed.
Listed Closed-End Funds will be required to

comply with the new disclosure and tagging requirements in their
Exchange Act periodic reports beginning with the Form N-CSR that covers
the first six-month period that begins on or after January 1, 2024. All
other issuers will be required to comply with the new disclosure and
tagging requirements in their Exchange Act periodic reports on Forms
10-Q and 10-K (for their fourth fiscal quarter) beginning with the
first filing that covers the first full fiscal quarter that begins on
or after October 1, 2023.\369\
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    \369\ For example, the compliance dates for a registrant with a
December 31, 2023 fiscal year end is as follows: (1) Issuers that
file periodic reports on Forms 10-Q and 10-K will be required to
begin complying with the new disclosure and tagging requirements in
their Form 10-K for the fiscal year ending on December 31, 2023 as
it relates to repurchases made during the quarter ending December
31, 2023; (2) FPIs that report using Form 20-F will be required to
begin filing new Form F-SR for the quarter ending June 30, 2024; and
(3) Listed Closed-End Funds will be required to begin complying with
the new disclosure and tagging requirements in Form N-CSR for the
six-month period ending on June 30, 2024.
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IV. Other Matters

    If any of the provisions of these rules, or the application thereof
to any person or circumstance, is held to be invalid, such invalidity
shall not affect other provisions or application of such provisions to
other persons or circumstances that can be given effect without the
invalid provision or application. Pursuant to the Congressional Review
Act,\370\ the Office of Information and Regulatory Affairs has
designated these amendments a ``major rule,'' as defined by 5 U.S.C.
804(2).
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    \370\ 5 U.S.C. 801 et seq.
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V. Economic Analysis

    We are mindful of the costs imposed by, and the benefits derived
from, our rules. Section 3(f) of the Exchange Act \371\ and section
2(c) of the Investment Company Act of 1940 (``Investment Company Act'')
\372\ require us, when engaging in rulemaking, to consider or determine
whether an action is necessary or appropriate in (or, with respect to
the Investment Company Act, consistent with) the public interest, and
to consider, in addition to the protection of investors, whether the
action will promote efficiency, competition, and capital formation. In
addition, 15 U.S.C. 78w(a)(2) (section 23(a)(2) of the Exchange Act)
requires the Commission to consider the effects on competition of any
rules the Commission adopts under the Exchange Act and prohibits the
Commission from adopting any rule that would impose a burden on
competition not necessary or appropriate in furtherance of the purposes
of the Exchange Act.\373\
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    \371\ 15 U.S.C. 78c(f).
    \372\ 15 U.S.C. 80a-2(c).
    \373\ 15 U.S.C. 78w(a)(2).
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    We have considered the economic effects of the amendments,
including their effects on competition, efficiency, and capital
formation. Many of the effects discussed below cannot be quantified.
Consequently, while we have, wherever possible, attempted to quantify
the economic effects expected from these amendments, much of the
discussion remains qualitative in nature. Where we are unable to
quantify the economic effects of the final amendments, we provide a
qualitative assessment of the potential effects.
    As discussed in greater detail in Sections I and III above, the
final amendments include a requirement to disclose historical daily
repurchase activity in an exhibit to Forms 10-K and 10-Q (for corporate
issuers that report on domestic forms), on Form N-CSR (for Listed
Closed-End Funds), and on new quarterly Form F-SR for FPIs reporting on
the FPI forms (due to be filed within 45 days after the end of the
respective quarter). This disclosure, which is required to be
structured using Inline XBRL, includes the number of shares repurchased
by an issuer, the average price per share paid, total number of shares
purchased as part of publicly announced plans or programs, the maximum
number (or approximate dollar value) of shares that may yet be
repurchased under the publicly announced plans or programs, number of
shares repurchased on the open market, the number of shares intended to
qualify for the Rule 10b-18 non-exclusive safe harbor, and the number
of shares repurchased pursuant to a Rule 10b5-1 plan. This disclosure
will be required to be filed, rather than furnished.
    The final amendments also require additional disclosure on Forms
10-Q, 10-K, 20-F, and N-CSR about the issuer's repurchase program and
practices, including the objectives or rationales for the share
repurchases, the process or criteria used to determine the amount of
repurchases, and whether purchases were made pursuant to a plan that is
intended to satisfy the affirmative defense conditions of Rule 10b5-
1(c), or intended to qualify for the Rule 10b-18 non-exclusive safe
harbor. In addition, the final amendments eliminate the requirement in
Item 703 of Regulation S-K that issuers disclose their monthly
repurchase data in their periodic reports. Further, the final
amendments require disclosure of any policies and procedures relating
to purchases and sales of the issuer's securities by its officers and
directors during a repurchase program, including any restrictions on
such transactions. Further, the amendments also require an issuer to
indicate whether certain officers or directors purchased or sold shares
or other units of the class of the issuer's equity securities that is
the subject of an issuer share repurchase plan or program within four
business days before or after the issuer's public announcement of such
repurchase plan or program. Finally, the amendments add new quarterly
disclosure in periodic reports on Forms 10-K and 10-Q related to an
issuer's adoption and termination of certain trading arrangements. The
final amendments require the additional disclosures to be structured
using Inline XBRL.

A. Baseline and Affected Parties

1. Affected Parties
    Repurchase disclosures are currently required by Item 703 of
Regulation S-K (on Forms 10-Q and 10-K), Item 16E of Form 20-F, and
Item 14 of Form N-CSR (for Listed Closed-End Funds). The disclosure is
required with respect to any purchase made by or on behalf of the
issuer or any ``affiliated purchaser'' of shares or other units of any
class of the issuer's equity securities that is registered pursuant to
section 12 of the Exchange Act. Based on staff analysis of EDGAR
filings for calendar year 2021, the amendments will affect the same
categories of issuers, including approximately 6,700 issuers with a
class of securities registered under section 12 that file on Forms 10-Q
and 10-K and approximately 800 issuers with a class of securities
registered under section 12 that file on Form 20-F.\374\ In addition,
based on staff analysis of Morningstar Direct data for 2021,
approximately 500 Listed Closed-End Funds are expected to be affected
by the amendments to Form N-CSR. We lack the data to estimate the
number of affected ``affiliated purchasers.''
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    \374\ Registered investment companies (but not business
development companies) and asset-backed securities issuers are
excluded from the count of operating companies cited above. We refer
to FPIs that file on Form 20-F as FPIs in this section for brevity,
unless specified otherwise. Only FPIs that file on Form 20-F are
subject to the amendments. MJDS filers that file on Form 40-F are
not subject to the amendments. See MJDS Release, supra note 219.
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    Among the issuers described above, issuers that recently engaged in
repurchases are most likely to be affected by the final
amendments.\375\

Based on data from Compustat and EDGAR filings for fiscal years ending
between January 1, 2021, and December 31, 2021, we estimate that
approximately 3,600 corporate issuers that conducted repurchases would
be more directly affected by the amendments (among them, approximately
300 Form 20-F filers).\376\ In addition, based on staff analysis of
Form N-CEN filings for 2021, approximately 100 Listed Closed-End Funds
conducted repurchases.\377\ Based on these estimates, most of the
affected issuers are corporate issuers that file periodic reports on
domestic forms.
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    \375\ Issuers with no repurchases today could be affected by the
amendments to the extent they were planning future repurchases and