[Federal Register Volume 87, Number 31 (Tuesday, February 15, 2022)]
[Proposed Rules]
[Pages 8443-8472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01068]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 229, 232, 240, 249, and 274

[Release Nos. 34-93783; IC-34440; File No. S7-21-21]
RIN 3235-AM94


Share Repurchase Disclosure Modernization

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: The Securities and Exchange Commission is proposing amendments 
to modernize and improve disclosure about repurchases of an issuer's 
equity securities that are registered under the Securities Exchange Act 
of 1934. Specifically, the proposed amendments would require an issuer 
to provide more timely disclosure on a new Form SR regarding purchases 
of its equity securities for each day that it, or an affiliated 
purchaser, makes a share repurchase. The proposed amendments would also 
enhance the existing periodic disclosure requirements about these 
purchases.

DATES: Comments should be received on or before April 1, 2022.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/regulatory-actions/how-to-submit-comments); or

Paper Comments

     Send paper comments to Secretary, Securities and Exchange 
Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number S7-21-21. This file number 
should be included on the subject line if email is used. To help us 
process and review your comments more efficiently, please use only one 
method of submission. The Commission will post all comments on the 
Commission's website (http://www.sec.gov/rules/proposed.shtml). 
Comments also are available for website viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549-1090, on official business days between the hours of 10 a.m. and 
3 p.m. Operating conditions may limit access to the Commission's public 
reference room. All comments received will be posted without change. 
Persons submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly.
    Studies, memoranda, or other substantive items may be added by the 
Commission or staff to the comment file during this rulemaking. A 
notification of the inclusion in the comment file of any such materials 
will be made available on our website. To ensure direct electronic 
receipt of such notifications, sign up through the ``Stay Connected'' 
option at www.sec.gov to receive notifications by email.

FOR FURTHER INFORMATION CONTACT: Steven G. Hearne, Senior Special 
Counsel, Office of Rulemaking, at (202) 551-3460, Division of 
Corporation Finance; and, with respect to the application of the 
proposal to investment companies, Bradley Gude, Special Counsel, at 
(202) 551-6792, Investment Company Regulation Office, Division of 
Investment Management; U.S. Securities and Exchange Commission, 100 F 
Street NE, Washington, DC 20549.

SUPPLEMENTARY INFORMATION: We are proposing to amend or add the 
following rules and forms:

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Commission reference                                CFR citation
                                                    (17 CFR)
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Regulation S-K..............  Item 10 through 1305  Sec.  Sec.   229.10
                                                     through 229.1305.
                              Item 601............  Sec.   229.601.
                              Item 703............  Sec.   229.703.
Regulation S-T..............  Rule 10 through 903.  Sec.  Sec.   232.10
                                                     through 232.903.
                              Rule 405............  Sec.   232.405.
Securities Exchange Act of    Proposed Rule 13a-21  Sec.   240.13a-21.
 1934 (Exchange Act) \1\.
                              Proposed Form SR
                              Form 20-F...........  Sec.   249.220f.
                              Form N-CSR..........  Sec.  Sec.   249.331
                                                     and 274.128.
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Table of Contents

I. Introduction
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    \1\ 15 U.S.C. 78a et seq.
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II. Discussion of Proposed Amendments
    A. Proposed Form SR
    B. Proposed Revisions to Item 703, Form 20-F, and Form N-CSR
    1. Additional Disclosure
    2. Clarifying Amendments
    C. Structured Data Requirement
III. General Request for Comment
IV. Economic Analysis
    A. Baseline and Affected Parties
    1. Affected Parties
    2. Baseline
    B. Benefits
    C. Costs
    D. Reasonable Alternatives
V. Paperwork Reduction Act
VI. Small Business Regulatory Enforcement Fairness Act
VII. Initial Regulatory Flexibility Analysis Statutory Authority

[[Page 8444]]

I. Introduction

    We are proposing changes to the requirements for disclosure of 
purchases of equity securities made by or on behalf of an issuer or any 
affiliated purchaser.\2\ Issuers may repurchase their shares through, 
among other means, open market purchases, tender offers, private 
negotiated transactions, and accelerated share repurchases. Issuers 
typically disclose repurchase plans or programs at the time that the 
share repurchases are authorized by the board of directors. Most share 
repurchases are executed over time through open market purchases 
through such share repurchase plans or programs. Issuers are not 
required to, and typically do not, disclose the specific dates on which 
they will execute trades pursuant to an announced repurchase plan or 
program. Investors and other market participants normally do not become 
aware of an issuer's actual share repurchase-related trading activity 
until they are reported in an issuer's periodic reports, long after the 
trades have been executed.
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    \2\ For purposes of this release, the term ``issuer'' includes 
affiliated purchasers and any person acting on behalf of the issuer 
or an affiliated purchaser. The term ``affiliated purchaser'' as 
used in Item 703 is defined in 17 CFR 10b-18(a)(3). References 
throughout this release to ``issuer repurchases'' include purchases 
by affiliates of the issuer and purchases by any person acting on 
behalf of the issuer or an affiliated purchaser.
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    The proposed amendments are intended to improve the quality, 
relevance, and timeliness of information related to issuer share 
repurchases. This proposal results from an ongoing, comprehensive 
evaluation of our disclosure requirements. As part of this evaluation, 
in April 2016, the Commission issued a Concept Release on the business 
and financial disclosure required by Regulation S-K, including 
disclosure pursuant to Item 703.\3\
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    \3\ See Business and Financial Disclosure Required by Regulation 
S-K, Release No. 33-10064 (Apr. 13, 2016) [81 FR 23915 (Apr. 22, 
2016)] (``Concept Release''). The release requested comment on, 
among other things, whether Item 703 disclosure is important to 
investors, whether the Commission should require more granular or 
more frequent repurchase disclosure, and whether there should be a 
de minimis monetary threshold for disclosure. We received 
approximately 30 comment letters that addressed Item 703 and we 
discuss these comments throughout this release, where relevant.
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    The Commission adopted Item 703 in 2003 to require disclosure on a 
quarterly basis of 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 registered under Section 12 of the Exchange 
Act.\4\ The disclosure requirement applies to both open market and 
private transactions. When it adopted Item 703, the Commission noted 
that an issuer's stock price often increases following an issuer's 
public announcement of a repurchase plan or program and that some 
issuers publicly announce repurchase programs, but do not actually 
purchase any securities or purchase only a small portion of the 
announced amount.\5\ The Commission concluded that disclosure of an 
issuer's actual purchases would inform investors whether, and to what 
extent, the issuer had followed through on its original plan.\6\
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    \4\ See Purchases of Certain Equity Securities by the Issuer and 
Others, Release No. 33-8335 (Nov. 10, 2003) [68 FR 64952 (Nov. 17, 
2003)] (``Adopting Release'').
    \5\ Id. at 64963.
    \6\ Id.
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    Currently, Item 703 share repurchase disclosure is required in Form 
10-Q (17 CFR 249.308a) for the issuer's first three fiscal quarters and 
in Form 10-K (17 CFR 249.310) for the issuer's fourth quarter.\7\ The 
same disclosure is required in Form 20-F on an annual basis for foreign 
private issuers and in Form N-CSR on a semi-annual basis for certain 
closed-end funds. In particular, Item 9 of Form N-CSR implements the 
requirements of Item 703 for certain registered closed-end investment 
management companies (``registered closed-end funds''), varying from 
Item 703 only to account for the different reporting period covered by 
Form N-CSR.\8\ Similarly, Item 16E of Form 20-F applies the Item 703 
requirements to foreign private issuers.\9\ Accordingly, unless the 
context otherwise requires, references in this release to ``Item 703'' 
should be read to include these parallel provisions of Form N-CSR and 
Form 20-F.
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    \7\ Certain information regarding share repurchases is also 
required to be disclosed in an issuer's financial statements, 
including in the statements of cash flows indicating the amount of 
cash paid for repurchased securities and the statements of changes 
in shareholders' equity indicating any reduction in securities 
outstanding and additional paid-in capital for the securities 
repurchased. If securities are repurchased for purposes other than 
retirement, or if ultimate disposition has not yet been decided, the 
amount and cost of the repurchased securities may be shown 
separately on the balance sheets and statements of changes in 
shareholders' equity as a deduction from the total of securities, 
additional paid-in capital, and retained earnings.
    \8\ See Adopting Release at 64963.
    \9\ See Adopting Release at 64962.
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    More specifically, Item 703 currently requires an issuer to 
disclose in tabular format:
     The total number of shares (or units) purchased, 
regardless of amount and regardless of whether made pursuant to a 
publicly announced plan or program, by the issuer or any affiliated 
purchaser during the relevant period, reported on a monthly basis and 
by class, including footnote disclosure regarding the number of shares 
purchased other than through a publicly announced plan or program and 
the nature of the transaction;
     The average price paid per share (or unit);
     The total number of shares (or units) purchased as part of 
a publicly announced repurchase plan or program; and
     The maximum number (or approximate dollar value) of shares 
(or units) that may yet be purchased under the plans or programs.
    Item 703 also requires footnote disclosure in the aggregate of the 
principal terms of all 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.
    We recognize that there are a number of reasons that issuers 
conduct share repurchases and that share repurchases can have a 
positive or negative impact on the market for an issuer's securities. 
The high dollar volume, nearly $700 billion in 2020, of recent share 
repurchase activity has been accompanied by public interest in 
corporate payouts in the form of share repurchases.\10\ Various studies 
address motivations behind corporate payouts and the choice of the form 
of payout (repurchases or dividends).\11\
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    \10\ See Section IV.A.2, infra and note 60 and accompanying 
text.
    \11\ See Section IV.A., infra for a more detailed discussion of 
the various studies.
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    Some studies have found that issuers often use repurchases in a 
manner aligned with shareholder value maximization, such as to offset 
share dilution after new stock is issued, to facilitate stock- and 
stock option-based employee compensation programs, to help signal the 
issuer's view that its stock is undervalued, or because the issuer's 
board has otherwise determined that a repurchase program is a prudent 
use of the issuer's excess cash.\12\
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    \12\ See Section IV.A.2, infra.
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    Other observers, however, have expressed concerns about issuers' 
uses of share repurchases. Some research has

[[Page 8445]]

shown that repurchases can serve as a form of real earnings management 
(through decreasing the denominator of earnings-per-share (``EPS'')) 
and thus be subject to short-term earnings management objectives of an 
executive seeking to meet or beat consensus forecasts.\13\ In addition, 
because announcements of repurchases and actual repurchase trades can 
also effect short-term upward price pressure, share price- or EPS-tied 
compensation arrangements could incentivize executives to undertake 
repurchases in an attempt to maximize their compensation.\14\ Several 
commentators have highlighted what they viewed to be the opportunistic 
and harmful use of issuer share repurchases by issuer insiders.\15\ 
Some of these commentators view issuer share repurchases as a tool to 
raise the price of an issuer's stock in a way that allows insiders and 
senior executives to extract value from the issuer instead of using the 
funds to invest in the issuer and its employees.\16\ A further concern 
raised by some commentators is the potential for share repurchases to 
be used by issuers as a mechanism to inflate the compensation of their 
executives in a manner that is not transparent to investors or the 
market.\17\ In addition, a number of commenters recommended expanding 
the disclosure required by Item 703 in response to the Commission's 
request for comments regarding Item 703 in the Concept Release.\18\ 
Some commenters also supported increasing the frequency of reporting 
share repurchases.\19\
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    \13\ For evidence on the use of repurchases as a method of real 
earnings management, see infra note 79. See also Rulemaking Petition 
4-746 (June 25, 2019), Rulemaking Petition Requesting Repeal and 
Reform of Rule 10b-18 to Address Manipulative Repurchase Programs 
that Harm Workers, available at https://www.sec.gov/rules/petitions/2019/petn4-746.pdf, at 4 (expressing concern that repurchases can be 
used to inflate share price and EPS-linked executive compensation) 
(``Rulemaking Petition 4-746'').
    \14\ See, e.g., Chan, K., Ikenberry, D., Lee, I., & Wang. Y., 
Share Repurchases as a Potential Tool to Mislead Investors, 16 Corp. 
Fin. 137 (2010) (``Chan et al. (2010)'') (finding in 1980-2000 data 
that a limited number of managers may have used repurchases in a 
misleading way as ``cheap talk''). For a discussion of the use of 
repurchases to influence compensation tied to per-share measures, 
see infra note 81.
    \15\ See infra note 82; Jackson, Jr., R.J., Stock Buybacks and 
Corporate Cashouts, Speech by Commissioner Jackson Before the Center 
for American Progress (June 11, 2018), available at https://www.sec.gov/news/speech/speech-jackson-061118 (``Jackson Speech''); 
https://www.cnbc.com/2021/03/02/elizabeth-warren-rips-stock-buybacks-as-nothing-but-paper-manipulation.html (``Warren article'') 
(expressing Senator Warren's view that share repurchases increase 
the price of an issuers shares through the issuer's purchase of its 
securities on the market rather than investing in the issuer's 
business); Palladino, L., Do Corporate Insiders Use Stock Buybacks 
for Personal Gain?, 34(2) Int'l Rev of Applied Econ. 152-174 (2020) 
(``Palladino (2020)'') (finding increased insider selling in 
quarters where buybacks are occurring); and Palladino, L. & 
Lazonick, W., Regulation Stock Buybacks: The $6.3 Trillion Question, 
Roosevelt Institute Working Paper (May 2021), available at https://rooseveltinstitute.org/publications/regulating-stock-buybacks-the-6-3-trillion-question/ (``Regulation Stock Buybacks Article''). See 
also Fried, J.M., Testimony of Jesse M. Fried on Stock Buybacks 
before the U.S. House of Representatives Subcommittee on Investor 
Protection, Entrepreneurship, and Capital Markets (Oct, 17, 2019) 
available at SSRN: https://ssrn.com/abstract=3474175 (``Fried 
Testimony'').
    \16\ See, e.g., Warren Article; and Lazonick, W., Clinton's 
Proposals on Stock Buybacks Don't Go Far Enough, Harvard Business 
Review (Aug. 11, 2015) available at https://hbr.org/2015/08/clintons-proposals-on-stock-buybacks-dontgo-far-enough.
    \17\ See, e.g., Jackson Speech; Regulation Stock Buybacks 
Article; and Fried Testimony. Fried asserted that executives may use 
repurchases to enrich themselves at the expense of public investors 
by: Conducting a share repurchase when the issuer's stock price is 
lower than the ``stock's actual stock value,'' resulting in a value 
transfer from selling shareholders to non-selling shareholders pro 
rata; the manipulation of the stock price and earnings metrics in 
compensation arrangements; or repurchase announcements made solely 
to boost the stock price before sales by executives.
    \18\ See, e.g., letters in response to the Concept Release from 
SEC Investor Advisory Committee (Jun. 15, 2016); Council of 
Institutional Investors (Jul. 8, 2016) (``CII''); W. Klein and T. 
Amy (Jul. 19, 2016) (``Klein & Amy''); Domini Social Investments 
(Jul. 21, 2016) (``Domini''); California State Teachers' Retirement 
System (Jul. 21, 2016) (``CalSTRS''); American Federation of State, 
County and Municipal Employees (Jul. 21, 2019) (``AFSCME''); AFL-CIO 
(Jul. 21, 2016) (``AFL-CIO''); California Public Employees' 
Retirement System (``CalPERS'') (Jul. 19, 2016); Better Markets, 
Inc. (Jul. 21, 2016) (``Better Markets''); and Americans for 
Financial Reform (Aug. 10, 2016) (``AFR''). Other commenters, 
however, opposed expanding the disclosure required by Item 703. See, 
e.g., letters in response to the Concept Release from U.S. Chamber 
of Commerce (Jul. 20, 2016) (``Chamber''); FedEx Corporation (Jul. 
21, 2016) (``FedEx''); Business Roundtable (Jul. 21, 2016); 
Securities Industry and Financial Markets Association (Jul. 21, 
2016) (``SIFMA''); Fenwick West LLP (Aug. 1, 2016) (``Fenwick''); 
General Motors Company (Sept. 30, 2016) (``GM''); and Financial 
Executives International (Oct.3, 2016) (``FEI'').
    \19\ See, e.g., letters in response to the Concept Release from 
Klein & Amy; and AFR. See also letter in response to the Concept 
Release from CalPERS supporting disclosure on Form 8-K of 
significant equity repurchases. Other commenters, however, supported 
maintaining the current frequency of reporting share repurchases on 
a quarterly basis. See, e.g., letters in response to the Concept 
Release from Chamber; SIFMA; and Fenwick.
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    We also received a rulemaking petition expressing general support 
for the current regulatory regime for issuer share repurchases, but 
recommending revisions to the Commission's executive compensation 
disclosure requirements to require disclosure of whether issuer share 
repurchases have affected the calculation of the repricing of any 
options, stock appreciation rights, or option-like instruments.\20\
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    \20\ See Rulemaking Petition 4-772 (Apr. 21, 2021), Request to 
Amend Regulation S-K (17 CFR 229.402(d), instruction (7)), available 
at https://www.sec.gov/rules/petitions/2021/petn4-772.pdf 
(recommending revisions to 17 CFR 229.402(d), instruction 7). We 
believe that the additional information relating to share 
repurchases that we are proposing would help meet the goals of the 
rulemaking petition by better enabling investors to determine 
whether issuer repurchases trigger higher payments to senior 
executives under performance-based compensation plans, such as by 
altering earnings per share calculations.
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    In light of the growth of issuer share repurchase plans in recent 
years and the concerns expressed by commentators, we believe investors 
could benefit from improving the quality, relevance, and timeliness of 
information related to issuer share repurchases. In particular, we are 
concerned that, because issuers are repurchasing their own securities, 
asymmetries may exist between issuers and affiliated purchasers and 
investors with regard to information about the issuer and its future 
prospects. This, in turn, could exacerbate some of the potential harms 
associated with issuer repurchases. To help address these information 
asymmetries, we are proposing a new disclosure form and additional 
disclosure requirements about issuer repurchases.\21\
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    \21\ In a separate release, we are proposing several rules and 
form amendments to address potentially abusive practices associated 
with 17 CFR 240.10b5-1 (``Rule 10b5-1'') trading arrangements, 
grants of options and other equity instruments with similar features 
and the gifting of securities. See Release No. 33-11013 Rule 10b5-1 
and Insider Trading (Jan. 13, 2022) (``Rule 10b5-1 Proposing 
Release'').
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    The proposed amendments would require more detailed and more 
frequent disclosure about issuer share repurchases, and require issuers 
to present the disclosure using a structured data language, which could 
allow investors to:
     Better understand the extent of an issuer's activity in 
the market, including potential impacts on the issuer's share price;
     Better understand an issuer's motivation for its share 
repurchases, and how it is executing its purchase plan; and
     Gain potential insight into any relationship between share 
repurchases and executive compensation and stock sales.
    The proposed amendments could also improve the ability of investors 
to identify repurchases that are more likely to be driven by managerial 
self-interest (e.g., increasing the share price prior to an insider's 
sale, meeting a threshold in an executive compensation arrangement, or 
meeting consensus earnings forecast) and thereby promote investor 
protection.

II. Discussion of Proposed Amendments

    We are proposing to modernize and improve the disclosure required 
about

[[Page 8446]]

repurchases of an issuer's equity securities by:
     Requiring daily repurchase disclosure on a new Form SR, 
which would be furnished to the Commission one business day after 
execution of an issuer's share repurchase order;
     Amending Item 703 to require additional detail regarding 
the structure of an issuer's repurchase program and its share 
repurchases; and
     Requiring information disclosed pursuant to Item 703 of 
Regulation S-K and pursuant to Form SR to be reported using a 
structured data language (specifically, Inline eXtensible Business 
Reporting Language or ``Inline XBRL'').

A. Proposed Form SR

    We are proposing new Exchange Act Rule 13a-21 and Form SR that 
would require an issuer, including a foreign private issuer and certain 
registered closed-end funds, to report 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 
by the issuer pursuant to Exchange Act Section 12.\22\ The issuer would 
have to furnish a new Form SR before the end of the first business day 
following the day on which the issuer executes a share repurchase.\23\ 
The Form SR would require the following disclosure in tabular format, 
by date, for each class or series of securities:
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    \22\ 15 U.S.C. 781. Registered investment companies other than 
registered closed-end funds are not required to provide the 
repurchase disclosure under Item 703 (as implemented in Form N-CSR). 
Accordingly, proposed Form SR also would not be filed by registered 
investment companies other than registered closed-end funds. See 
proposed rule 13a-21(b). Business development companies (``BDCs''), 
which are not registered investment companies, provide the 
repurchase disclosure of Item 703 on Forms 10-K and 10-Q rather than 
Form N-CSR.
    \23\ ``Execution'' has a commonly understood meaning consistent 
with the Commission's explanation in Interpretation of Section 
206(3) of the Investment Advisers Act of 1940, Release No. IA-1732, 
(July 17, 1998) [63 FR 39505 (July 23, 1998)] that the ``ending 
point of a transaction is when the actual exchange of securities and 
payment occurs, which is known as `settlement.' The date of 
execution (i.e., the trade date) marks an earlier point of a 
securities transaction at which the parties have agreed to its terms 
and are contractually obligated to settle the transaction.'' Release 
No. IA-1732 at notes 13-14 and accompanying text (citing Radiation 
Dynamics, Inc. v. Goldmuntz, 464 F.2d 876, 891 (2d Cir. 1972) with 
the explanation that the ``court held that, for purposes of insider 
trading liability under Rule 10b-5 under the Exchange Act, the time 
of a `purchase or sale' of securities is determined by reference to 
when the parties are obligated to perform the terms of the 
transaction, not when final performance occurs.''). Similarly, in 
the security-based swaps context, 17 CFR 240.15Fi-1(f) defines 
``execution'' as ``the point at which the counterparties become 
irrevocably bound to a transaction under applicable law.''
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    (1) Identification of the class of securities purchased;
    (2) The total number of shares (or units) purchased, including all 
issuer repurchases whether or not made pursuant to publicly announced 
plans or programs;
    (3) The average price paid per share (or unit);
    (4) The aggregate total number of shares (or units) purchased on 
the open market;
    (5) The aggregate total number of shares (or units) purchased in 
reliance on the safe harbor in 17 CFR 240.10b-18 (``Rule 10b-18''); and
    (6) The aggregate total number of shares (or units) purchased 
pursuant to a plan that is intended to satisfy the affirmative defense 
conditions of Rule 10b5-1(c).\24\
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    \24\ The Commission adopted Rule 10b5-1 in 2000 to clarify the 
meaning of ``manipulative or deceptive device[s] or contrivance[s]'' 
prohibited by Exchange Act Section 10(b) and Rule 10b-5 with respect 
to trading on the basis of material nonpublic information. See 
Selective Disclosure and Insider Trading, Release No. 33-7881 (Aug. 
15, 2000) [65 FR 51716 (Aug. 24, 2000)]. Rule 10b5-1(c) established 
an affirmative defense to Rule 10b-5 liability for insider trading 
in circumstances where it is clear that the trading was not based on 
material nonpublic information and the trade was pursuant to a 
binding contract, an instruction to another person to execute the 
trade for the instructing person's account, or a written plan.
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    When adopting the Item 703 disclosure requirements, the Commission 
stated its belief that information about the equity securities an 
issuer has repurchased is important to investors.\25\ The Commission 
also stated its belief that Item 703 would provide investors and the 
marketplace with 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.\26\ While we continue to 
believe that the existing Item 703 requirements provide useful 
information,\27\ we believe that proposed Form SR could enhance 
transparency and enable more timely investor review of issuer share 
repurchases. Proposed Form SR would require issuer share repurchases to 
be reported on a daily basis before the end of the first business day 
following the day on which the repurchase transaction has been 
executed. Investors could use this more detailed and timely disclosure 
to monitor and evaluate issuer share repurchases, and their effects on 
the market for the issuer's securities.
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    \25\ See Adopting Release at 64962.
    \26\ Id.
    \27\ See, e.g., Bonaim[eacute], A., Mandatory Disclosure and 
Firm Behavior: Evidence from Share Repurchases, 90 Acct. Rev. 1333 
(2015) (``Bonaim[eacute] (2015)'') (stating that ``[a]nalysts and 
investors alike are concerned with properly estimating repurchases 
since actual repurchase activity is linked to future operating and 
stock price performance'').
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    The data currently required to be disclosed under Item 703 does not 
provide daily detail about such repurchases. Information asymmetries 
may exist between issuers and affiliated purchasers and investors, 
particularly due to the timing of the current Item 703 disclosures.\28\ 
Because issuers are repurchasing their own securities, issuers and 
affiliated purchasers will typically have significantly more, and more 
detailed, information about the issuer and its future prospects. 
Proposed Form SR could provide investors with additional insight into 
the details of a share repurchase closer in time to the repurchase, 
which may diminish any informational asymmetry due to the timing of 
current Item 703 disclosure.
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    \28\ One commentator emphasized the need to regulate 
consistently economically equivalent practices. See Grullon, G. & 
Ikenberry, D., What Do We Know About Stock Repurchases, J. App. 
Corp. Fin. 13 (2000) at 48 (referring to the requirement that a Form 
4 Statement of Changes of Beneficial Ownership of Securities (17 CFR 
249.104) be filed before the end of the second business day 
following the day on which a transaction resulting in a change in 
beneficial ownership has been executed). See also Fried Testimony 
(proposing a two-day disclosure rule, but suggesting that even more 
frequent disclosure would be preferable).
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    Generally, there are legitimate business reasons for issuers to 
repurchase securities; nevertheless, incentives also exist for issuers 
to engage in opportunistic share repurchases. For example, as noted 
above, some commentators have asserted that issuer repurchases could 
potentially be used to increase share prices in order to enhance 
executive compensation and insider stock value.\29\ The share price 
increase that often occurs in connection with an issuer share 
repurchase plan may raise certain financial ratios, such as EPS, that 
are often used as executive compensation targets.\30\ Proposed Form SR, 
when combined with other information available about the issuer, could 
provide investors with additional insight into such possible behavior.
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    \29\ See supra notes 16 and 17.
    \30\ Id. See also notes 80, 81, and 83, infra.
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    We are therefore proposing that Form SR include daily disclosure of 
the total number of shares purchased, class of securities, and the 
average price paid per share (or unit) \31\ as well as the aggregate 
total number of shares

[[Page 8447]]

purchased on the open market, the aggregate total number of shares 
purchased in reliance on the safe harbor in Rule 10b-18,\32\ and the 
aggregate total number of shares purchased pursuant to a plan that is 
intended to satisfy the affirmative defense conditions of Rule 10b5-
1(c), to enhance the repurchase information that would be available to 
investors. Requiring disclosure of the number of shares purchased on 
the open market would provide a clearer indication of the scale of the 
issuer's activity in the market for each day that repurchases are made. 
Requiring disclosure of the number of shares purchased in reliance on 
the non-exclusive safe harbor in Rule 10b-18 \33\ and pursuant to a 
plan that is intended to satisfy the affirmative defense conditions of 
Rule 10b5-1(c) could also enable investors to better understand how an 
issuer has structured its repurchase activity.
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    \31\ The total number of shares purchased, class of securities, 
and the average price paid per share (or unit) correspond to 
information that is currently disclosed pursuant to Item 703.
    \32\ The proposed disclosure would not provide a defense to 
manipulative conduct for purchases that are not in fact eligible to 
rely on the safe harbor.
    \33\ Rule 10b-18, which was adopted in 1982 and amended in 2003, 
provides a voluntary, non-exclusive ``safe harbor'' from liability 
for manipulation under Sections 9(a)(2) and 10(b) of the Exchange 
Act, and Rule 10b-5, when an issuer or its affiliated purchaser bids 
for or purchases shares of the issuer's common stock in accordance 
with the Rule 10b-18's manner, timing, price, and volume conditions. 
See Adopting Release. See also Purchases of Certain Equity 
Securities by the Issuer and Others; Adoption of Safe Harbor, 
Release No. 34-19244 (Nov. 17, 1982), [47 FR 53333 (Nov. 26, 1982)].
---------------------------------------------------------------------------

    We are proposing to require issuers to furnish Form SR no later 
than one business day after execution of the issuer's share repurchase 
transaction order. The proposed daily detail would provide more 
granular information to investors that could enable them to better 
evaluate the market for the issuer's securities and the actions of the 
issuer's insiders. For example, when combined with existing executive 
compensation, Section 16 (15 U.S.C. 78p), and financial statement 
disclosures, the proposed Form SR disclosures may improve the ability 
of investors to identify issuer repurchases potentially driven by 
managerial self-interest, such as seeking to increase the share price 
prior to an insider sale \34\ or to change the value of an option or 
other form of executive compensation.\35\
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    \34\ See note 80 infra and accompanying discussion.
    \35\ See note 79 infra and accompanying discussion. In this 
regard, we note that share price- or earnings per share-tied 
compensation arrangements could incentivize executives to undertake 
repurchases, in an attempt to maximize their compensation.
---------------------------------------------------------------------------

    The proposed requirement to furnish the daily detail in Form SR on 
the Commission's Electronic Data Gathering, Analysis, and Retrieval 
(``EDGAR'') system no later than one business day after execution of 
the share repurchase order could help alleviate information asymmetries 
and promote more informed investment decisions. Under the current 
rules, Item 703 disclosure about share repurchases is required in an 
issuer's periodic reports.\36\ As noted above, some have expressed 
concern about the timeliness of this disclosure and the asymmetry of 
information available to the market while issuers are conducting share 
repurchase programs.\37\ While existing Item 703 disclosure provides 
investors and market participants with a general understanding of 
issuer share repurchases over time, the disclosure relates to 
repurchases made several weeks or months earlier, resulting in a delay 
in such information being relayed to investors and absorbed by the 
market. This delay could contribute to an information asymmetry between 
the issuer and investors.
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    \36\ For domestic issuers, this disclosure is required 
quarterly. However, for registered closed-end funds the disclosure 
is made semi-annually and for foreign private issuers is included in 
their annual reports. See supra note 8 and accompanying text.
    \37\ See discussion in Section I.
---------------------------------------------------------------------------

    Several commenters on the Concept Release asked the Commission to 
require disclosure closer in time to share repurchases.\38\ We 
additionally note that the disclosure deadlines for share repurchases 
in several foreign jurisdictions are shorter than in the U.S. For 
example, the Financial Conduct Authority in the United Kingdom and the 
Australian Securities Exchange provide listing standards requiring 
certain issuers to disclose share repurchases on the next business 
day.\39\ In addition, to the extent a foreign private issuer files 
public reports pursuant to its home country requirements with respect 
to share repurchases, some of these issuers file those reports on 17 
CFR 249.306 (``Form 6-K'') where the issuer deems those reports 
material to investors.
---------------------------------------------------------------------------

    \38\ See, e.g., letters in response to the Concept Release from 
Klein & Amy (recommending Form 8-K disclosure); CalPERS 
(recommending Form 8-K disclosure of significant repurchases in line 
with other significant corporate events); and AFR (recommending 
disclosure at the time the repurchase occurs because that is the 
time that any price manipulation would be occurring). But see, e.g., 
letters in response to the Concept Release from Chamber; FedEx; 
SIFMA; Fenwick; GM; FEI (supporting the current frequency of share 
repurchases).
    \39\ See, e.g., Australian Securities Exchange Listing Rule 3.8A 
requiring listed issuers to file a notification disclosing 
acquisitions before the commencement of trading on the business day 
after any day on which shares are bought back; and Financial Conduct 
Authority (United Kingdom) Listing Rule 12.4.6R requiring certain 
issuers to file a notification disclosing acquisitions no later than 
7:30 a.m. on the business day following the day that the purchase 
occurred. See also Ontario Securities Commission (Canada) National 
Instrument 55-104 requiring certain issuers to file an insider 
trading report disclosing acquisition within 10 days of the end of 
the month.
---------------------------------------------------------------------------

    While we are proposing that issuers provide this new daily detail 
disclosure one business day after execution of a share repurchase 
order, we recognize that the repurchases may not finally settle until 
two business days after the transaction.\40\ However, we believe that 
issuers generally have access to details regarding their purchase 
orders that have been executed and that these executed orders typically 
are confirmed and accurately cleared and settled.\41\ The proposed 
amendments would require an issuer to disclose material errors or 
changes to information previously reported on an amended Form SR. We 
believe that this provision would allow for timely and accurate 
disclosure the day after execution of the share repurchase order, with 
the ability to make corrections, if needed, in amended filings.
---------------------------------------------------------------------------

    \40\ See 17 CFR 240.10b-10.
    \41\ See supra note 23.
---------------------------------------------------------------------------

    We are proposing to require issuers to furnish, rather than file, 
Form SR. As a result, issuers would not be subject to liability under 
Section 18 of the Exchange Act for the disclosure in the form, and the 
information would not be deemed incorporated by reference into filings 
under the Securities Act and thus would not be subject to liability 
under Section 11 of the Securities Act, unless the issuer expressly 
incorporated such information.\42\ We believe that deeming the 
information provided on Form SR to be furnished rather than filed would 
alleviate some of the concerns about requiring this disclosure within a 
shorter timeframe without undermining the transparency objectives of 
the proposed disclosures.
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    \42\ In addition, by requiring the Form SR to be furnished, a 
late submission of the form would not affect eligibility to use Form 
S-3 or to file a short-form registration statement under General 
Instruction A.2 of Form N-2. General Instruction I.A.3(b) to Form S-
3 requires that all reports required to be filed with the Commission 
during the preceding 12 months have been filed; the same 
requirements apply under General Instruction A.2 of Form N-2.
---------------------------------------------------------------------------

Request for Comment
    1. Should we adopt new Form SR to require daily repurchase 
disclosure, as proposed? Would less frequent disclosure of daily share 
repurchases (e.g., weekly, monthly, or quarterly disclosure) provide 
sufficiently timely information about issuer repurchases? Would less 
detailed disclosure (e.g., aggregated disclosure of repurchases on a 
weekly or monthly basis, rather than

[[Page 8448]]

daily), that is furnished more frequently than under current Item 703, 
provide sufficiently useful disclosure? Instead of adopting Form SR, 
should we amend Form 8-K or another existing form to require daily 
repurchase disclosure?
    2. Should we instead require an issuer to disclose its share 
repurchase program and continue to report actual share repurchases on a 
periodic basis? If so, should we require the issuer to disclose its 
planned share repurchases at least 30 days prior to the first 
repurchase transaction? Would a different disclosure deadline be more 
appropriate? Should the disclosure specify the amount of securities 
that may be purchased or any additional information? How would the 
burden of complying with such requirements compare with the burdens of 
complying with proposed Form SR? In reporting actual share repurchases 
under this approach, should we require the periodic disclosure to be 
broken out on a monthly basis, as currently required under Item 703 of 
Regulation S-K, Item 16E of Form 20-F, and Item 9 of Form N-CSR, or 
should we expand the disclosure to require a breakout of repurchase 
activity on a more frequent basis?
    3. Should we amend issuers' exhibit filing requirements to require 
issuers to provide daily, weekly, or biweekly repurchase disclosure in 
an exhibit to the issuer's periodic reports? If so, should such an 
exhibit requirement be in lieu of or in addition to reporting on Form 
SR?
    4. Should we require disclosure of executed share repurchase orders 
on Form SR, as proposed? Are there concerns that executed orders may 
fail to settle and that issuers would not be able to accurately 
disclose the shares purchased on the next business day? How frequently 
do executed orders fail to clear and settle? Should we base the 
requirement on something other than order execution? For example, 
should we require issuers to furnish Form SR within one business day 
after the order clears and settles and the issuer receives trade 
confirmation?
    5. Should we require an issuer to furnish disclosure on Form SR 
within one business day of execution of a share repurchase order, as 
proposed? Would issuers have sufficient time to prepare and furnish 
such disclosure? If not, how long should an issuer have to furnish Form 
SR? How would a longer time period to furnish Form SR impact the costs 
associated with preparing the disclosures and the benefits to investors 
of more timely disclosure? Would a longer period compared to the 
proposal (e.g., two days, five days, ten days or more) still provide 
timely information about issuer repurchases? Would the proposed 
deadline for furnishing Form SR negatively impact issuers' ability to 
effectively conduct share repurchases, such as by increasing the price 
issuers may have to pay to repurchase their securities?
    6. As discussed above, proposed Form SR would require daily 
reporting of the total number of shares repurchased, the average price 
paid per share, issuer share repurchases on the open market, shares 
purchased in reliance on the safe harbor in Rule 10b-18, and shares 
purchased pursuant to a plan that is intended to satisfy the 
affirmative defense conditions of Rule 10b5-1(c). Should we adopt these 
Form SR disclosure requirements, as proposed? Should we eliminate or 
modify any of these requirements? Should we add any disclosure 
requirements to Form SR, such as disclosure of the highest and lowest 
price paid per share for open market purchases or any other 
information?
    7. Should we require issuers to furnish an amended Form SR to 
correct material changes to transactions previously reported on Form 
SR, as proposed? Alternatively, should we require all corrections to be 
made on an amended Form SR, regardless of materiality?
    8. We have proposed that foreign private issuers would have the 
same Form SR filing obligations as domestic issuers. Should we exempt 
all foreign private issuers from the requirement to file a Form SR or 
provide different requirements? We note that some foreign private 
issuers are required to provide daily detailed disclosure in their home 
jurisdictions. To the extent these issuers file public reports pursuant 
to their home country requirements with respect to share repurchases, 
some also file those reports under Form 6-K where the issuer deems 
those reports material to investors. Should we exempt these foreign 
private issuers from the Form SR requirement?
    9. Should we exempt or provide different requirements for 
registered closed-end funds from the Form SR requirements? Those funds 
already provide share repurchase disclosure less frequently than most 
other issuers subject to the disclosure requirement in that they 
disclose the information semi-annually rather than quarterly. Would 
less frequent disclosure continue to be appropriate for these issuers 
or, conversely, would investors benefit from the more frequent 
disclosure on Form SR? Alternatively, because the proposal would only 
apply to issuers with securities registered pursuant to Section 12 of 
the Exchange Act, it would only apply to those registered closed-end 
funds with securities that trade on an exchange. Should we expand the 
scope of covered registered closed-end funds to more closely match the 
scope of corporate issuers subject to repurchase disclosure 
requirements by applying the requirements to registered closed-end 
funds that would be subject to Section 12(g) of the Exchange Act but 
for Section 12(g)(2)(B) (15 U.S.C. 78l(g)(2)(B)), which exempts them 
from the requirement to register their securities under that section 
unless they are listed on an exchange?
    10. We have observed that smaller issuers generally conduct fewer 
issuer share repurchases, but that smaller issuers tend to trade in 
less liquid markets where share repurchases may have more pronounced 
impacts. Should we consider an exemption from the proposed Form SR 
reporting requirement for non-accelerated filers, smaller reporting 
companies, or emerging growth companies?
    11. Should we provide a de minimis exception to the Form SR 
reporting requirement for share repurchases that are below a certain 
level? Should any such threshold be based on a dollar threshold, share 
number, a percentage of public float, or another metric? If so, what 
level would be appropriate and why?
    12. Should we require that Form SR be furnished, as proposed? 
Alternatively, should we require the form to be filed? Should a late or 
missing Form SR filing affect an issuer's Form S-3 eligibility or 
eligibility to file a short-form registration statement on Form N-2? 
Alternatively, would extending the timeframe for providing Form SR 
(e.g., to one day after settlement, or two or more business days after 
order execution) alleviate concerns such that we should require the 
Form SR to be filed rather than furnished? As proposed, Form SR would 
be furnished to the Commission, but the Item 703 disclosure would be 
filed as part of the periodic report. Should repurchase information in 
the Form SR be subject to different liability than disclosure in issuer 
periodic reports?

B. Proposed Revisions to Item 703, Form 20-F, and Form N-CSR

    We are proposing to revise and expand the disclosure requirements 
in Item 703, Form 20-F, and Form N-CSR to work in conjunction with 
proposed Form SR to provide investors with more detailed and timely 
information they can use to evaluate issuer share repurchases.

[[Page 8449]]

1. Additional Disclosure
    We are proposing to revise Item 703, with corresponding changes to 
Form 20-F and Form N-CSR, to require additional disclosure about an 
issuer's share repurchases. Specifically, we propose to 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 if so, 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. We are additionally proposing to require 
that issuers disclose if any of their officers or directors subject to 
the reporting requirements under Section 16(a) of the Exchange Act (15 
U.S.C. 78p(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 10 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.
    In response to the Commission's request for comments regarding Item 
703 in the Concept Release, many commenters recommended expanding the 
disclosure required by Item 703.\43\ Some of these commenters 
specifically supported requiring disclosure of the objective or 
rationale for repurchases.\44\ As noted above, other commentators have 
expressed concern that issuer share repurchases may be used to inflate 
executive compensation and cash out executives' securities.\45\
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    \43\ See, e.g., letters in response to the Concept Release from 
CII; Domini; CalSTRS; AFSCME; AFL-CIO; CalPERS; and Better Markets. 
Other commenters, however, opposed expanding the disclosure required 
by Item 703. See, e.g., letters in response to the Concept Release 
from Chamber; FedEx; Business Roundtable (Jul. 21, 2016); SIFMA; 
Fenwick; GM; and FEI.
    \44\ See, e.g., letters in response to the Concept Release from 
Klein & Amy; Domini; CalSTRS; AFL-CIO; CalPERS (indicating that more 
detailed disclosure of the issuer's share repurchase plan would 
enable analysis in light of the short and long-term ramifications of 
the repurchase).
    \45\ See discussion in Section I.
---------------------------------------------------------------------------

    Based on these comments and concerns, we are proposing additional 
disclosure requirements intended to improve investor access to 
information regarding the rationale and objectives of any issuer 
repurchase plan. In addition, the proposed disclosure regarding whether 
the plan is expected to be in reliance on the Rule 10b-18 safe harbor 
or pursuant to a Rule 10b5-1 plan, as well as disclosures regarding any 
policies and procedures (including any restrictions) relating to 
purchases and sales imposed on officers and directors during a 
repurchase plan, should allow investors to better understand how an 
issuer has structured its repurchase plan and whether it has taken 
steps to prevent officers and directors from potentially benefiting 
from issuer repurchases in a manner that is not available to regular 
investors. Similarly, the proposed checkbox will obviate the need for 
investors to review Section 16(a) filings close in time to any 
announcement of an issuer purchase plan or program to see if any 
officer or director reporting pursuant to Section 16(a) of the Exchange 
Act has 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 close in time to the announcement. Together 
with the additional daily level detail that we are proposing to require 
on Form SR, we believe this additional information would help investors 
to assess whether the issuer or its insiders are potentially engaged in 
self-interested or otherwise inefficient repurchases and thereby help 
mitigate some of the potential harms associated with issuer 
repurchases.
Request for Comment
    13. Many issuers voluntarily choose to announce their share 
repurchase plans or programs publicly. Item 703 currently requires 
disclosure of the date each plan or program was announced if the issuer 
did publicly announce it. Should we clarify what constitutes an 
announcement for purposes of the disclosure requirement? For example, 
should the announcement have to have been made in a Form 8-K, another 
existing form, or press release? Should we require all open market 
share repurchase plans to be publicly announced?
    14. We have proposed requiring issuers to indicate via the proposed 
checkbox if any officer or director reporting pursuant to Section 16(a) 
of the Exchange Act purchased or sold the issuer's equity securities 
that are the subject of an issuer share repurchase plan or program 
within 10 business days before or after any announcement of an issuer 
purchase plan or program. How would investors use this information? 
Would the proposed requirement discourage issuers from publicly 
announcing plans or programs? Is there other information in combination 
with, or instead of, this disclosure that could notify investors and 
help them process information regarding officer and director 
transactions made close in time to the issuer's share repurchase plan 
announcement? If an issuer doesn't publicly announce its repurchase 
plan, should the issuer be required to check the box if there are 
officer or director transactions within a certain time from the 
initiation of the repurchase plan or program (for example, within 10 
business days of initiation)?
    15. Is a 10-business-day period before or after the announcement an 
appropriate window for the proposed indication about officer and 
director transactions? Would a shorter or longer period provide more 
appropriate notice to investors and cover a sufficient time period 
where an insider may be most likely to trade in relation to the 
issuer's announcement of a share repurchase plan? Should we add a 
proposed checkbox to Form SR, in lieu of or in addition to Item 703, 
Form 20-F, and Form N-CSR?
    16. Issuers would need to rely on representations from, or Section 
16 reports filed by, their officers and directors to indicate whether 
any officer or director has purchased or sold the issuer's securities 
in the relevant time period. Should we provide guidance about the 
issuer's scope of inquiry and explain what an issuer may rely on for 
purposes of complying with the checkbox requirement?
    17. Should we require issuers to describe the objective or 
rationale for their share repurchases and process or criteria used to 
determine the amount of repurchases, as proposed? How would investors 
use this information? Should we also require information regarding how 
share repurchases are financed or their anticipated or actual impact on 
leverage ratios or the cost of capital? Should we ask issuers to 
disclose if they specifically considered other uses for the funds being 
used for the share repurchase? Is there additional disclosure regarding 
the reasons for, or expected effects of a share repurchase plan that 
should be required? Would this proposed requirement result in 
boilerplate disclosure?
    18. Proposed Item 703 and proposed Form SR would require issuers to 
disclose whether repurchases were made pursuant to a plan that is 
intended to satisfy the affirmative defense conditions of Rule 10b5-
1(c). Does the proposal require an appropriate level of

[[Page 8450]]

detail regarding Rule 10b5-1 plans? Should this disclosure additionally 
contemplate repurchases made pursuant to ``other pre-arranged trading 
plans'' that issuers may seek to rely on in lieu of Rule 10b5-1 plans? 
How should we define ``other pre-arranged trading plans'' in this 
circumstance? How would investors use information regarding these 
plans?
    19. Proposed Item 703, and proposed Form SR would require 
disclosure of whether shares were purchased in reliance on the safe 
harbor in Rule 10b-18. How would investors use this information? Is the 
use of the term ``purchased in reliance on the safe harbor'' 
sufficiently clear?
    20. How would investors use the proposed disclosure regarding 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? Should we require 
disclosure of broader policies and procedures related to a repurchase 
program, for example, how material nonpublic information is controlled 
for or potential impacts, if any, on executive compensation metrics? Is 
there additional information about repurchase plans and trading by 
insiders that we should require to be disclosed?
    21. In this release, we are proposing amendments to require an 
issuer to disclose whether it repurchased its securities pursuant to a 
Rule 10b5-1 plan, and if so, the date that such a plan was adopted or 
terminated. We also are proposing amendments to Item 703 to require 
disclosure of any policies and procedures the issuer has established 
relating to purchases and sales of its securities by its officers and 
directors, including any restriction on such transactions. In a 
separate release described in note 21 above, we are proposing new Item 
408 under Regulation S-K and corresponding amendments to Forms 10-Q and 
10-K to require: (1) Quarterly disclosure of the use of Rule 10b5-1 and 
other trading arrangements by a registrant, and its directors and 
officers, for the trading of the issuer's securities; and (2) annual 
disclosure of an issuer's insider trading policies and procedures. If 
the Commission adopts both the proposed Item 703 and Item 408 
amendments, are there opportunities to streamline or simplify 
overlapping disclosure requirements that may apply to an issuer's 
repurchase plan? If so, which provisions should we eliminate or how 
should we modify the proposed disclosure requirements?
    22. As proposed, disclosure of issuer share repurchases would be 
required on a daily basis on Form SR. In addition, Item 703 would 
continue to require monthly summary disclosure of share repurchases 
that would be similar to, but not the same as, Form SR tabular 
disclosure. What are the costs and benefits of providing this 
disclosure as proposed? Do these different sets of share repurchase 
disclosures provide distinctly valuable information for investors and 
market participants? Should there instead be more alignment between 
Item 703 and Form SR tabular data? Alternatively, should we adopt a 
subset of the proposed disclosures, such as:
     Only Form SR;
     Form SR and Item 703 and Forms 20-F and N-CSR, amended as 
proposed, but without monthly data;
     No Form SR, but Item 703 and Forms 20-F and N-CSR, amended 
as proposed and including daily, weekly, or bi-weekly repurchase 
disclosure; or
     No Form SR, but Item 703 and Forms 20-F and N-CSR, amended 
as proposed, with an exhibit providing daily detail about share 
repurchases made during the period covered by the report?
    23. We have not proposed exemptions or different requirements from 
the proposed revisions to Item 703, Form 20-F, and Form N-CSR for 
foreign private issuers, registered closed-end funds, non-accelerated 
filers, smaller reporting companies, or emerging growth companies. 
Should we exempt or provide different requirements from some or all of 
the proposed amendments for these or other classes of issuers?
2. Clarifying Amendments
    In addition to the proposed amendments described above, we are 
proposing clarifying amendments to Item 703, Form 20-F, and Form N-CSR 
to simplify application of the rules and remove unnecessary 
instructions. Specifically, we are proposing:
     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''; \46\
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    \46\ 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 Instruction 1 and 2 in the Instructions to 
paragraphs (b)(3) and (b)(4) and effectuate those instruction by adding 
``aggregate'' to 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;
     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.
Request for Comment
    24. Do the changes we are proposing simplify and clarify Item 703 
and the corresponding provisions in Forms 20-F and N-CSR? Are there 
other changes we should consider to clarify the share repurchase 
disclosure requirements?

C. Structured Data Requirement

    We are proposing to require issuers to tag information disclosed 
pursuant to Item 703 of Regulation S-K, Item 16E of Form 20-F, Item 9 
of Form N-CSR, and Form SR in a structured, machine-readable data 
language. Specifically, we are proposing to require issuers to tag the 
disclosures in Inline XBRL in accordance with Rule 405 of Regulation S-
T and the EDGAR Filer Manual.\47\ 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 9 of Form N-CSR.
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    \47\ 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 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 operating companies 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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    In 2009, the Commission adopted rules requiring operating companies 
to submit the information from the financial statements (including 
footnotes and schedules thereto) included in certain registration 
statements and periodic and current reports in a structured, machine-
readable data language using eXtensible Business Reporting Language 
(``XBRL'').\48\ In 2018, the Commission

[[Page 8451]]

adopted modifications to these requirements by requiring issuers to use 
Inline XBRL, which is both machine-readable and human-readable, to 
reduce the time and effort associated with preparing XBRL filings and 
improve the quality and usability of XBRL data for investors.\49\ In 
2020, the Commission adopted Inline XBRL requirements for registered 
closed-end funds and business development companies that will be 
effective no later than February 2023.\50\
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    \48\ Interactive Data to Improve Financial Reporting, Release 
No. 33-9002 (Jan. 30, 2009) [74 FR 6776 (Feb. 10, 2009)] (``2009 
Financial Statement Information Adopting Release'') (requiring 
submission of an Interactive Data File to the Commission in exhibits 
to such reports); see also Release No. 33-9002A (Apr. 1, 2009) [74 
FR 15666 (Apr. 7, 2009)].
    \49\ Inline XBRL Filing of Tagged Data, Release No. 33-10514 
(June 28, 2018) [83 FR 40846, 40847 (Aug. 16, 2018)]. Inline XBRL 
allows filers to embed XBRL data directly into an HTML document, 
eliminating the need to tag a copy of the information in a separate 
XBRL exhibit. Id. at 40851.
    \50\ Securities Offering Reform for Closed-End Investment 
Companies, Release No. 33-10771 (Apr. 8, 2020) [85 FR 33290 (Jun. 1, 
2020) at 33318].
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    Requiring Inline XBRL tagging of the repurchase disclosures would 
benefit investors by making the disclosures 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 would enable 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. At the same 
time, we do not expect the incremental compliance burden associated 
with tagging the additional information to be unduly burdensome, 
because issuers subject to the proposed tagging requirements are or in 
the near future will be subject to similar Inline XBRL requirements in 
other Commission filings.\51\
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    \51\ See supra notes 50 and 51. Inline XBRL requirements for 
registered closed-end funds and business development companies will 
take effect beginning August 1, 2022 (for seasoned issuers) and 
February 1, 2023 (for all other issuers). See id. If the proposed 
Inline XBRL requirements are adopted in the interim, they will not 
apply to registered closed-end funds and business development 
companies prior to the aforementioned effectiveness dates.
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Request for Comment
    25. Should we require issuers to include block text tagging of 
narrative disclosures, as well as detail tagging of quantitative 
amounts disclosed within the narrative and tabular disclosure required 
by Item 703 of Regulation S-K, Item 16E of Form 20-F, Item 9 of Form N-
CSR, and Form SR in Inline XBRL, as proposed? Are there any changes we 
should make to promote accurate and consistent tagging? If so, what 
changes should we make?
    26. Should we modify the scope of the repurchase disclosures 
required to be tagged? For example, should we only require tagging of 
the quantitative repurchase disclosures?
    27. Should we require issuers to use a different structured data 
language to tag repurchase disclosures? If so, what structured data 
language should we require? Should we leave the structured data 
language undefined?
    28. We have not proposed exemptions or different requirements from 
the proposed structured data requirement for foreign private issuers, 
registered closed-end funds, non-accelerated filers, smaller reporting 
companies, or emerging growth companies. Should we exempt or provide 
different requirements from some or all of the proposed amendments for 
these or other classes of issuers?

III. General Request for Comment

    The Commission requests comment on the rule and form amendments 
proposed in this release, whether any changes to our rules or forms are 
necessary or appropriate to implement the objectives of our proposed 
rule and form amendments, and other matters that might affect the 
proposals contained in this release.

IV. Economic Analysis

    We are mindful of the costs imposed by, and the benefits obtained 
from, our rules. Section 3(f) of the Exchange Act \52\ and Section 2(c) 
of the Investment Company Act of 1940 (``Investment Company Act'') \53\ 
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, 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.\54\
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    \52\ 15 U.S.C. 78c(f).
    \53\ 15 U.S.C. 80a-2(c).
    \54\ 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    We have considered the economic effects of the proposed 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 this proposal, much of the 
discussion remains qualitative in nature. Where we are unable to 
quantify the economic effects of the proposed amendments, we provide a 
qualitative assessment of the potential effects and encourage 
commenters to provide data and information that would help quantify the 
benefits, costs, and the potential impacts of the proposed amendments 
on efficiency, competition, and capital formation.
    As discussed in greater detail in Section II above, the Commission 
is proposing to require disclosure of repurchases, on a daily basis, on 
a new form. The proposed daily disclosure, which would be required to 
be structured using Inline XBRL, would include the number of shares 
repurchased by an issuer, the average price per share paid, the number 
of shares repurchased on the open market, the number of shares 
repurchased in reliance on the Rule 10b-18 non-exclusive safe harbor, 
and the number of shares repurchased pursuant to a Rule 10b5-1 plan.
    The Commission is also proposing to require, on Forms 10-Q, 10-K, 
20-F, and N-CSR, additional disclosure about the issuer's repurchase 
program and practices, including the objective or rationale for the 
share repurchases, the structure of an issuer's repurchase program, and 
whether purchases were made pursuant to a plan that is intended to 
satisfy the affirmative defense conditions of Rule 10b5-1(c), or in 
reliance on the Rule 10b-18 non-exclusive safe harbor. Further, the 
Commission is proposing to 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. The Commission is also proposing 
to require an issuer to indicate whether any officer or director 
reporting pursuant to 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 10 business days before or after the issuer's

[[Page 8452]]

announcement of such repurchase plan or program.
    We request comment on this economic analysis from all interested 
parties. With regard to any comments, we note that such comments are of 
greatest assistance to our rulemaking initiative if accompanied by 
supporting data and analysis of the issues addressed in those comments.

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 9 of Form N-CSR (for registered 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 by the 
issuer pursuant to Section 12 of the Exchange Act. Based on staff 
analysis of EDGAR filings for 2020, the proposed amendments would 
affect the same categories of filers, including approximately 5,900 
filers of Forms 10-Q and 10-K and approximately 700 filers of Form 20-F 
with a class of securities registered under Section 12. In addition, 
based on staff analysis of Morningstar Direct data for 2020, 
approximately 500 registered closed-end funds are expected to be 
affected by the proposed amendments to Form N-CSR. We lack the data to 
estimate the number of affected ``affiliated purchasers.''
    Among the filers described above, filers that conduct repurchases 
today are most likely to be affected by the proposed amendments.\55\ 
Based on data from Compustat and EDGAR filings for fiscal year 2020, we 
estimate that approximately 3,300 operating companies that conducted 
repurchases during fiscal year 2020 would be affected by the amendments 
(among them, approximately 250 Form 20-F filers).\56\ In addition, 
based on staff analysis of Form N-CEN filings for 2020, approximately 
100 registered closed-end funds conducted repurchases.\57\ Based on 
these estimates, most of the affected issuers are operating companies 
that file periodic reports on domestic forms.
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    \55\ Filers with no repurchases today could be affected by the 
proposed amendments to the extent they were planning future 
repurchases and such plans were affected by the costs of the 
additional disclosure requirements.
    \56\ As a caveat, a complete estimate of the number of affected 
filers is limited by data coverage. A source of data commonly used 
in existing studies, Standard & Poor's Compustat, has limited 
coverage of small and unlisted registrants and Form 20-F filers. 
Therefore, we supplement data from Compustat with structured data 
from financial statement disclosures in EDGAR filings (with the 
caveat that variation in filer use of tags to characterize their 
repurchases may result in some data noise).
    \57\ Based upon a staff review, we expect approximately 20% of 
registered closed-end funds to be affected by the proposal engage in 
share repurchases, as compared to approximately half of operating 
companies.
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    Shareholders and prospective investors would also be affected by 
the proposed amendments to the extent that they receive additional and 
more timely insight into an issuer's repurchase activity. Financial 
intermediaries that execute repurchases at the issuer's instruction 
would also be affected by the proposed amendments to the extent that 
they have to prepare the information necessary for an issuer's 
responsive disclosure, and indirectly, to the extent that the 
amendments affect the incidence of repurchases and thus demand for 
financial intermediaries' services in connection with executing 
repurchases. To the extent that the proposed requirement 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, results in 
more issuers establishing such policies and procedures or imposing such 
restrictions, officers and directors would also be affected by the 
proposed amendments. We lack data to assess how many of these parties 
will be affected.
2. Baseline
    Corporate payout decisions have been extensively studied for 
decades.\58\ In recent years the high dollar volume of repurchase 
activity has renewed interest in corporate payouts in the form of share 
repurchases. During 2020, share repurchases accounted for approximately 
$670 billion.\59\ Aggregate repurchases have grown significantly over 
the past four decades, but the increase relative to aggregate market 
capitalization has been significantly more modest due to the 
accompanying growth in aggregate market

[[Page 8453]]

capitalization; in addition, aggregate repurchases, both in absolute 
terms and relative to aggregate market capitalization, have exhibited 
considerable cyclical fluctuations (increasing during economic booms 
and declining during recessions).\60\ Dividends fluctuate less than 
repurchases, consistent with dividends being viewed by the market as a 
commitment to regularly return cash to shareholders.\61\ As a result, 
managers may endeavor to keep dividend payments stable, mainly avoiding 
dividend cuts, justifying the market's interpretation.\62\ Firms that 
exclusively pay dividends are increasingly rare whereas the proportion 
of firms that regularly conduct repurchases has increased over time, 
consistent with repurchases being a partial substitute for 
dividends.\63\
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    \58\ For a more detailed discussion of the data and research on 
repurchases and other payouts, see SEC Staff Response to Congress: 
Negative Net Equity Issuance, December 2020, available at https://www.sec.gov/files/negative-net-equity-issuance-dec-2020.pdf (``2020 
Staff Study''); and Farre-Mensa, J., Michaely, R., & Schmalz, M. 
Payout Policy, 6 Ann. Rev. of Fin. Econ. 75 (2014) (``Farre-Mensa et 
al. (2014)''). Staff reports, statistics, and other staff documents 
(including those cited herein) represent the views of Commission 
staff and are not a rule, regulation, or statement of the 
Commission. The Commission has neither approved nor disapproved the 
content of these documents and, like all staff statements, they have 
no legal force or effect, do not alter or amend applicable law, and 
create no new or additional obligations for any person. The 
Commission has expressed no view regarding the analysis, findings, 
or conclusions contained therein. The focus of the 2020 Staff Study 
was determined by the directive of Congress in its Joint Explanatory 
Statement accompanying the Financial Services and General Government 
Appropriations Act, which directed the staff to study the recent 
growth of negative net equity issuances with respect to non-
financial issuers, including the history and effects of those 
issuers repurchasing their own securities, and the effects of those 
repurchases on investment, corporate leverage, and economic growth. 
The study provided data and statistics on share repurchases across 
different types of companies and time periods, as well as an 
extensive discussion of related evidence in existing research, which 
offers insight into the existing market baseline. For example, the 
study discusses the evidence on the favorable market reaction to 
repurchase announcements. Among its findings, the study notes that 
``[r]epurchases are an increasingly common way firms distribute cash 
to shareholders. There are several possible reasons firms conduct 
repurchases; some support efficient investment and for some the 
connection is less clear. The analysis below suggests that firms are 
more likely to conduct repurchases when they have excess cash and 
when they would benefit from increased reliance on debt financing.'' 
The study further notes that ``the data is consistent with firms 
using repurchases to maintain optimal levels of cash holdings and to 
minimize their cost of capital'' and that ``reasons for repurchases 
where the connection to efficient investment is less clear are 
unlikely to motivate the majority of repurchases since stock prices 
typically increase in response to repurchase announcements, 
suggesting that, at least on average, repurchases are viewed as 
having a positive effect on firm value.'' In discussing one of the 
criticisms of share repurchases, the study notes ``that insider 
sales may be timed to coincide with repurchase announcements. If 
insiders time sales to coincide with repurchase announcements and 
any resulting increase in stock price, executives may be 
incentivized to recommend repurchase programs to further their own 
gain.'' However, the study notes, it is ``difficult to ascertain the 
motivations underlying insider sales.'' As a caveat, existing 
studies referenced in this release, including the 2020 Staff Study, 
are necessarily constrained by existing disclosure limitations. The 
low frequency and the unstructured nature of existing Item 703 data 
on repurchase activity limit the ability of existing studies to 
gauge the extent of information asymmetry between issuers and 
investors associated with the execution of repurchase programs and 
its economic effects. Existing disclosure has also limited the 
ability of existing studies to draw a causal connection between 
managerial incentives and day-to-day execution of repurchase 
programs as well as quantify its economic effects. Further, while 
public attention has focused on the aggregate trends in repurchases, 
the attribution of aggregate trends to specific drivers of 
repurchases is complicated due to the presence of confounding 
factors that cannot be readily isolated in existing data. The 
discussed data limitations should be considered in evaluating 
existing studies of the motivations of repurchases. Additional 
caveats, where applicable, are referenced in the discussion of 
individual strands of research and evidence on repurchases below.
    \59\ Based on staff analysis of Standard & Poor's Compustat data 
related to share repurchases conducted during fiscal year 2020 by 
issuers listed on U.S. exchanges. This represented a significant 
decline from approximately $1 trillion in share repurchases during 
fiscal year 2019, in line with the effects of the COVID-19 crisis. 
The sample for this estimate is defined more broadly than in the 
2020 Staff Study (adding financial and U.S.-listed foreign issuers 
with Compustat data), resulting in larger aggregate totals.
    \60\ See, e.g., Campello M., Graham J., & Harvey, C., The Real 
Effects of Financial Constraints: Evidence from a Financial Crisis, 
97 J. Fin. Econ. 470 (2010); Dittmar, A. & Dittmar, R., The Timing 
of Financing Decisions: An Examination of the Correlation in 
Financing Waves, 90 J. Fin. Econ. 59 (2008) (``Dittmar and Dittmar 
(2008)''); Floyd, E., Li, N., & Skinner, D., Payout Policy through 
the Financial Crisis: The Growth of Repurchases and the Resilience 
of Dividends, 118 J. Fin. Econ 299 (2015). See also 2020 Staff Study 
(observing that growth in aggregate repurchases has fluctuated over 
the past several decades, as demonstrated by a large decline and 
rebound following the financial crisis, and also observing that 
share repurchases net of equity issuances as a percentage of 
aggregate market capitalization of public companies have remained 
relatively stable over the past decade, within the longer trend of 
modest percentage growth over the last forty years).
    \61\ See, e.g., Brealey, R., Myers, S., & Allen, F., Principles 
of Corporate Finance (12th ed. 2017). Issuers generally announce 
dividend policies, and markets react strongly to increases and 
reductions in dividends. See, e.g., Healy, P. & Palepu, K., Earnings 
Information Conveyed by Dividend Initiations and Omissions, 21 J. 
Fin. Econ. 149 (1988). Market reactions to initiations and omissions 
are even more pronounced. See Michaely, R., Thaler, R., & Womack, 
K., Price Reactions to Dividend Initiations and Omissions: 
Overreaction or Drift?, 50 J. Fin. 573 (1995); Lee, B.S. & Mauck, 
N., Dividend Initiations, Increases and Idiosyncratic Volatility, 40 
J. Corp. Fin. 47 (2016). These studies indicate that decreases in 
buybacks do not elicit the same negative market reaction as dividend 
decreases.
    \62\ For example, one survey of 384 CFOs and executives suggests 
that the ability to avoid reducing dividends was the top 
consideration of managers when determining dividend policy. See 
Brav, A., Graham, J., Harvey, C., & Michaely, R., Payout Policy in 
the 21st Century, 77 J. Fin. Econ. 483 (2005) (``Brav et al. 
(2005)'').
    \63\ See 2020 Staff Study. The partial substitution between 
dividends and repurchases has also been documented in academic 
studies. See, e.g., Skinner, D., The Evolving Relation between 
Earnings, Dividends and Stock Repurchases, 87 J. Fin. Econ. 582 
(2008); Grullon, G. & Michaely, R., Dividends, Share Repurchases, 
and the Substitution Hypothesis, 57 J. Fin. 1649 (2002).
---------------------------------------------------------------------------

    Information about recent repurchases is expected to be valuable to 
investors. Various studies argue that an issuer conducts repurchases 
when it believes its securities to be undervalued.\64\ Corporate 
insiders likely have a superior understanding of their business and 
industry. Academic research has suggested managers can use increases in 
distributions, such as new repurchase programs, to signal their view 
that the stock is undervalued and is expected to increase in the 
future.\65\ Several empirical studies show that on average share prices 
increase after actual share repurchases, suggesting that information 
about recent repurchases could be useful in predicting the trend of 
future share prices, above and beyond other market factors (while some 
other studies do not find this result).\66\ A related explanation for 
repurchases is that they are an effort to provide price support by 
supplying liquidity when selling pressure is high; thus, share prices 
would be lower during an issuer's repurchases and higher 
afterwards.\67\ In all of these scenarios, actual repurchases would 
precede a rise in the share price. Timely disclosure about recent 
actual repurchases can thus contain valuable information about the 
future movement of the share price that is not revealed to the market 
otherwise, and a lack of timely disclosure could contribute to 
information asymmetries between investors and issuers/insiders. The 
benefit of the information contained in a disclosure of recent 
repurchase activity would be lower to the extent that large issuer 
repurchases already have a price impact, resulting in price discovery 
and indirect revelation of information to the market, even in the 
absence of daily disclosure. Nevertheless, to the extent that an 
issuer's purchases incorporate insiders' future outlook on the firm, 
they could be informative to investors (complementing the information 
in Form 4 filings). The value of information on recent repurchases is 
not subsumed by the information content of announcements of repurchase 
programs. In the data, this is supported by the evidence of share price 
trends after actual repurchases.\68\ Importantly, after a repurchase 
announcement--which is voluntary for an issuer to make--an issuer 
retains considerable discretion on when to implement any repurchases 
and how much to repurchase at any point in time. Because, similar to 
information on individual insider trades, such information is likely to 
have a short-term component, its timely disclosure is expected to be 
relevant for

[[Page 8454]]

investors. Existing disclosures provide a significantly delayed, 
aggregated insight into the execution of announced repurchases. Thus, a 
large part of the information content of the day-to-day timing of 
issuer repurchases with regard to short-term share price movements may 
become obsolete and potentially obscured by aggregation by the time the 
disclosure is made under existing requirements.\69\
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    \64\ See Farre-Mensa et al. (2014).
    \65\ For analysis of signaling with repurchases, see, e.g., 
Vermaelen, T., Common Stock Repurchases and Market Signaling: An 
Empirical Study, 9(2) J. Fin. Econ. 139 (1981); Vermaelen, T., 
Repurchase Tender Offers, Signaling, and Managerial Incentives, 19 
J. Fin. & Quantitative Analysis 163 (1984); Constantinides, G. & 
Grundy, B., Optimal Investment with Stock Repurchase and Financing 
as Signals, 2 Rev. Fin. Stud. 445 (1989); Hausch, D. & Seward, J., 
Signaling with Dividends and Share Repurchases: A Choice Between 
Deterministic and Stochastic Cash Disbursement, 6 Rev. Fin. Stud. 
121 (1993); McNally, W., Open Market Stock Repurchase Signaling, 
28(2) Fin. Mgmt. 55 (1999). In some studies, authors find that 
repurchases send a stronger signal than dividends. See, e.g., Ofer, 
A. & Thakor, A., A Theory of Stock Price Responses to Alternative 
Corporate Cash Disbursement Methods: Stock Repurchases and 
Dividends, 42 J. Fin. 365 (1987); Persons, J., Heterogeneous 
Shareholders and Signaling with Share Repurchases, 3(3) J. Corp. 
Fin. 221-249 (1997).
    \66\ See, e.g., Dittmar, A. & Field, L. C., Can managers time 
the market? Evidence using repurchase price data, 115(2) J. Fin. 
Econ. 261-282 (2015) (``Dittmar and Field (2015)''); Ben-Rephael, 
A., Oded, J., & Wohl, A., Do Firms Buy Their Stock at Bargain 
Prices? Evidence From Actual Stock Repurchase Disclosures, 18 Rev. 
Fin. 1299 (2014) (``Ben-Rephael et al. (2014)''); Chan, K., 
Ikenberry, D., & Lee, I., Do Managers Time the Market? Evidence from 
Open-Market Share Repurchases, 31(9) J. of Banking & Fin. 2673-2694 
(2007); Cook, D., Krigman, L., & Leach, J.C., On the Timing and 
Execution of Open Market Repurchases, 17(2) Rev. of Fin. Studies, 
463-498 (2004) (``Cook et al. (2004)'') (finding that larger firms 
in the sample perform better than smaller firms in timing the price 
at which repurchases are executed). However, other studies do not 
find evidence that repurchases are driven by market timing. See, 
e.g., Obernberger, S., The Timing of Actual Share Repurchases, 
Working paper (2014) (concluding that contrarian trading rather than 
market timing ability explains the observed relation between returns 
and actual share repurchases); Dittmar and Dittmar (2008); 
Bonaim[eacute], A., Hankins, K., & Jordan, B., The Cost of Financial 
Flexibility: Evidence From Share Repurchases, 38 J. Corp. Fin., 345-
362 (2016) (finding that ``actual repurchase investments 
underperform hypothetical investments that mechanically smooth 
repurchase dollars through time by approximately two percentage 
points per year on average''). The differences in the conclusions 
may be due to differences in empirical methodology and sample 
period. Because these studies utilize presently available, monthly 
data, their conclusions may be noisy and may not map fully to the 
effects associated with daily repurchase activity. As a general 
caveat, any working papers cited here have generally not undergone 
peer review and may be subject to revision. Studies focused on 
returns following share repurchase announcements also find positive 
returns. See, e.g., Evgeniou, T., Junqu[eacute] de Fortuny, E., 
Nassuphis, N., & Vermaelen, T., Volatility and the Buyback Anomaly, 
49 J. Corp. Fin., 32-53 (2018); Bargeron, L., Kulchania, M., & 
Thomas, S., The Timing and Source of Long-Run Returns Following 
Repurchases, 52 J. Fin. & Quantitative Analysis 491 (2017); Peyer, 
U., & Vermaelen, T., The Nature And Persistence of Buyback 
Anomalies, 22 Rev. Fin. Stud. 1693 (2009). But see Fu, F. & Huang, 
S., The Persistence of Long-Run Abnormal Returns Following Stock 
Repurchases and Offerings, 62 Mgmt. Science 964 (2016) (documenting 
disappearance of long-run, post-repurchase abnormal returns during 
2003-2012).
    \67\ See, e.g., Liu, H. & Swanson, E., Is Price Support a Motive 
for Increasing Share Repurchases?, 38 J. Corp. Fin. 77 (2016) (``Liu 
and Swanson (2016)'').
    \68\ The price effects of actual repurchases discussed above are 
additional to any price effects of repurchase announcements. Because 
repurchase announcements precede actual repurchases, the 
announcement effect is already incorporated into the baseline share 
price, against which the price effects of actual repurchases are 
analyzed.
    \69\ Under existing requirements, while the delay in reporting 
can be relatively short, for example, when a repurchase is conducted 
at the end of a first, second, or third fiscal quarter, by a 
domestic large accelerated filer, in all cases disclosure will lag 
actual repurchases by weeks or months and is aggregated on a monthly 
basis.
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    Various studies address motivations behind corporate payouts and 
the choice of the form of payout (repurchases or dividends).\70\ In a 
number of instances, the use of repurchases can be efficient and 
aligned with shareholder value maximization. Sometimes issuers that 
have excess cash do not have profitable investment opportunities. In 
such instances, distributing the cash through dividends or repurchases 
can alleviate concerns that managers will spend the cash in sub-optimal 
ways, such as empire-building acquisitions.\71\ Survey evidence 
supports this theory, with the second most cited reason for conducting 
a repurchase being the ``lack of good investment opportunities.'' \72\ 
By returning excess cash to shareholders, repurchases free up that 
capital to be reinvested into businesses that lack the capital to 
pursue value-creating investment opportunities. Stock price reactions 
to announcements of new repurchase programs are higher for cash-rich 
issuers, which may be consistent with the creation of value when 
managers remove their discretion over how to invest excess cash and 
provide that cash to investors to redeploy as they see fit.\73\ Issuers 
may choose repurchases if the excess free cash flow stems from a one-
time windfall, or if they value financial flexibility and wish to avoid 
a costly, long-term commitment to higher dividends.\74\ For instance, 
firms that favor repurchases tend to have more volatile cash flows than 
dividend-paying firms.\75\ Issuers with excess free cash flow may also 
choose repurchases over dividends as the method of payout because 
repurchases are more tax-efficient for shareholders.\76\ Finally, 
repurchases may also be used to adjust an issuer's leverage upward, as 
part of adjustment towards the target capital structure, or as part of 
a market timing approach to capital structure.\77\
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    \70\ For a more detailed summary of the related studies, see 
2020 Staff Study and Farre-Mensa et al. (2014).
    \71\ See Jensen, M., Agency Costs of Free Cash Flow, Corporate 
Finance, and Takeovers, 76 Am. Econ. Rev. 323 (1986).
    \72\ See Brav et. al. (2005).
    \73\ See Grullon, G. & Michaely, R., The Information Content of 
Share Repurchase Programs, 59 J. Fin. 651-680 (2004).
    \74\ See, e.g., Guay, W. & Harford, J., The Cash-Flow Permanence 
and Information Content of Dividend Increases versus Repurchases, 
57(3) J. Fin. Econ. 385-415 (2000); Jagannathan, M., Stephens, C., & 
Weisbach, M., Financial Flexibility and the Choice between Dividends 
and Stock Repurchases, 57(3) J. Fin. Econ. 355-384 (2000). See also 
supra notes 62-63 and accompanying text.
    \75\ See Hoberg, G. & Prabhala, N., Disappearing Dividends, 
Catering, and Risk, 22 Rev. Fin. Stud. 79 (2009) (showing that 
riskier firms are less likely to pay dividends).
    \76\ See, e.g., Feng, L., Pukthuanthong, K., Thiengtham, D., 
Turtle, H. J., & Walker, T. J., The Effects of Cash, Debt, and 
Insiders on Open Market Share Repurchases, 25(1) J. App. Corp. Fin. 
55-63 (2013). The tax advantage of repurchases has been attenuated 
but not eliminated after the 2003 dividend tax cut. Outside of tax-
exempt/tax-deferred accounts, all shareholders are subject to taxes 
on dividends for the year the dividend was paid. In the case of 
repurchases, only selling shareholders are subject to taxes on 
capital gains (the remaining shareholders do not pay taxes until 
they sell their shares).
    \77\ See, generally, Baker, M. & Wurgler, J., Market Timing and 
Capital Structure, 57 J. Fin. 1 (2002). Some other evidence suggests 
that firms tend to repurchase stock and issue debt when the cost of 
debt falls relative to the cost of equity. See Ma, Y., Nonfinancial 
Firms as Cross[hyphen]Market Arbitrageurs, 74 J. Fin. 3041 (2019). 
See also Hovakimian, A., Role of Target Leverage in Security Issues 
and Repurchases, 77(4) J. Bus. 1041-1072 (2004) (finding that 
``equity issues and repurchases do not offset the accumulated 
deviation from the target and they are timed to market 
conditions'').
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    Some commentators and studies have noted that opportunistic insider 
behavior and agency conflicts, rather than firm value maximization, can 
motivate repurchases. In particular, repurchases can serve as a form of 
real earnings management (through decreasing the denominator of EPS) 
and thus be subject to short-term earnings management objectives of an 
executive seeking to meet or beat consensus forecasts.\78\ 
Announcements of repurchases and actual repurchase trades can also 
affect short-term upward price pressure.\79\ Share price- or EPS-tied 
compensation arrangements can thus incentivize executives to undertake 
repurchases, in an attempt to maximize their compensation,\80\ even if 
such

[[Page 8455]]

repurchases are not optimal from the shareholder value maximization 
perspective. Another instance of potentially inefficient repurchase 
behavior, which could have a negative effect on investors, involves 
insider incentives to raise the share price prior to insider sales.\81\ 
Conversely, some studies note that insider purchases of stock in 
conjunction with a repurchase announcement may strengthen the 
credibility of the repurchase signal.\82\ CFOs report considering the 
price of the stock when deciding whether to repurchase stock.\83\ 
Further, academic studies have found that firms conduct repurchases 
when stock prices are low.\84\ This trading, however, does not appear 
to degrade market quality, with several studies finding improved 
liquidity during repurchase programs.\85\
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    \78\ For evidence on the use of repurchases as a method of real 
earnings management, see, e.g., Burnett, B., Cripe, B., Martin, G., 
& McAllister, B., Audit Quality and the Trade-Off Between Accretive 
Stock Repurchases and Accrual-Based Earnings Management, 87 Acct. 
Rev. 1861 (2012). CFO survey responses indicate that increasing EPS 
is an important factor affecting share repurchase decisions 
according to Brav et. al. (2005). Investors may take this into 
account when evaluating EPS. For example, Hribar, P., Jenkins, N., & 
Johnson, W. B., Stock Repurchases as an Earnings Management Device, 
41 J. Acct. & Econ. 3 (2006), find that the market discounts EPS 
announcements in situations in which EPS would have been shy of 
analyst expectations but for share repurchases (and where 
repurchases are disclosed along with quarterly earnings). Kurt 
(2018) studies the use of accelerated share repurchases (ASRs) for 
real earnings management and concludes investors ``are not fooled'' 
by managers' use of ASRs as an earnings management device. See Kurt, 
Ahmet C., Managing EPS and Signaling Undervaluation as a Motivation 
for Repurchases: The Case of Accelerated Share Repurchases, 17(4) 
Rev. Acct. & Fin. 453-481. Nevertheless, earnings management-
motivated repurchases can have negative real effects on the issuer 
and its shareholders. For example, one recent study finds that 
repurchases used to push EPS above analyst expectations are 
accompanied by a 10% decrease in capital expenditures and a 3% 
decrease in research and development. See, e.g., Almeida, H., Fos, 
V., & Kronlund, M., The Real Effects of Share Repurchases, 119(1) J. 
Fin. Econ., 168-185 (2016) (``Almeida et al. (2016)''). Note that 
these findings do not necessarily generalize to repurchases at 
issuers outside the range of EPS approaching the earnings target, or 
to repurchases unrelated to EPS manipulation. A 2016 McKinsey & Co. 
report states that share repurchases do not improve shareholder 
returns simply by increasing EPS because, under certain conditions, 
there may have been more preferable uses for those funds such as 
debt reduction and reinvestment in the firm. See also, e.g., 
Ezekoye, O., Koller, T., & Mittal, A., How Share Repurchases Boost 
Earnings without Improving Returns, McKinsey, April 29, 2016, 
available at https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-share-repurchases-boost-earnings-without-improving-returns.
    \79\ With respect to actual share repurchases, a recent study 
shows that price support provided by actual share repurchases 
improves price efficiency, even when manipulation concerns might be 
highest, such as those that occur prior to insider sales. Busch, B. 
& Obernberger, S., Actual Share Repurchases, Price Efficiency, and 
The Information Content Of Stock Prices, 30 Rev. Fin. Stud. 324 
(2017) (``Busch and Obernberger (2017)''). With respect to share 
repurchase announcements, some have suggested that managers may take 
advantage of positive stock price reactions to non-binding 
repurchase announcements and use disingenuous repurchase 
announcements to manipulate share prices. See Chan et. al. (2010) 
(finding in 1980-2000 data that a limited number of managers may 
have used repurchases in a misleading way as ``cheap talk''). Such 
``cheap talk'' may result in lower announcement returns. See, e.g., 
Alice Bonaim[eacute], Repurchases, Reputation, and Returns, 47 J. 
Fin. & Quantitative Analysis 469 (2012) (``Bonaim[eacute] (2012)''); 
Bonaim[eacute] (2015). Some studies argue that ``cheap-talk'' 
repurchase announcements may correct mispricing by attracting 
additional market scrutiny. See Almazan, A., Banerji, S., & De 
Motta, A., Attracting Attention: Cheap Managerial Talk and Costly 
Market Monitoring, 63 J. Fin. 1399 (2008); Bhattacharya, U. & 
Jacobsen, S., The Share Repurchase Announcement Puzzle: Theory and 
Evidence, 20 Rev. Fin. 725 (2016).
    \80\ As an important caveat, the incentives would be weaker to 
the extent executive compensation plans and board committees that 
address executive compensation account for how repurchases would 
affect compensation targets and the value of incentive-based 
compensation. For evidence on the use of repurchases to influence 
compensation tied to per-share measures, see, e.g., Cheng, Y., 
Harford, J., & Zhang, T., Bonus-Driven Repurchases, 50 J. Fin. & 
Quantitative Analysis 447 (2015) (``Cheng et al. (2015)'') (finding 
that ``when a CEO's bonus is directly tied to earnings per share 
(EPS), his company is more likely to conduct a buyback,'' with the 
effect being ``especially pronounced when a company's EPS is right 
below the threshold for a bonus award,'' that ``[s]hare repurchasing 
increases the probability the CEO receives a bonus and the magnitude 
of that bonus, but only when bonus pay is EPS based,'' and further 
finding that ``[b]onus-driven repurchasing firms do not exhibit 
positive long-run abnormal returns''); Kim, S. & Ng, J., Executive 
Bonus Contract Characteristics and Share Repurchases, 93 Acct. Rev. 
289 (2018) (finding that ``managers are more (less) likely to 
repurchase shares and spend more (less) on repurchases when as-if 
EPS just misses (exceeds) the bonus threshold (maximum) EPS level,'' 
and that ``[m]anagers making bonus-motivated repurchases do so at a 
higher cost''). A different study documented a link between EPS 
targets and repurchases but did not find evidence of a negative 
effects on shareholders: Young, S. & Yang, J., Stock Repurchases and 
Executive Compensation Contract Design: The Role of Earnings Per 
Share Performance Conditions, 86 Acct. Rev. 703-733 (2011) (finding 
``a strong positive association between repurchases and EPS-
contingent compensation arrangements'' but also finding ``net 
benefits to shareholders from this association'' (including ``larger 
increases in total payouts'', a more pronounced ``positive 
association between repurchases and cash performance'' in the 
presence of surplus cash; greater likelihood of undervalued firms 
``signal[ing] mispricing through a repurchase,'' and ``lower 
abnormal accruals'') and ``no evidence that EPS-driven repurchases 
impose costs on share-holders in the form of investment myopia'') 
Further, a different study examined the real cost of EPS-motivated 
repurchases outside the context of compensation. See Almeida et al. 
(2016) (finding that ``[t]he probability of share repurchases that 
increase earnings per share (EPS) is sharply higher for firms that 
would have just missed the EPS forecast in the absence of the 
repurchase, when compared with firms that `just beat' the EPS 
forecast'' and that ``EPS-motivated repurchases are associated with 
reductions in employment and investment, and a decrease in cash 
holdings'' and concluding that ``managers are willing to trade off 
investments and employment for stock repurchases that allow them to 
meet analyst EPS forecasts''). See also Rulemaking Petition 4-746. 
But see 2020 Staff Study (finding that, based on a review of 
compensation disclosures in proxy statements for a sample of 50 
firms that repurchased the most stock in 2018 and 2019, ``82% of the 
firms reviewed either did not have EPS-linked compensation targets 
or had EPS targets but their board considered the impact of 
repurchases when determining whether performance targets were met or 
in setting the targets''); Fields, R., Buybacks and the Board: 
Director Perspectives on the Share Repurchase Revolution, Sept. 20, 
2016, available at https://corpgov.law.harvard.edu/2016/09/20/buybacks-and-the-board-director-perspectives-on-the-share-repurchase-revolution/ (concluding, based on interviews of ``44 
directors serving on the boards of 95 publicly traded US companies 
with an aggregate market capitalization of $2.7 trillion'' that 
``most directors said that their companies are aware of the 
relationship between buyback programs and compensation and that they 
make deliberate, informed choices to ensure that they reward 
executives for desired behavior rather than for financial 
manipulation of share prices. Anticipated buyback effects on EPS are 
usually factored into EPS targets, they say, and unanticipated 
effects can be adjusted out.'').
    \81\ See, e.g., Chan et. al. (2010). See also Bonaim[eacute], A. 
A. & Ryngaert, M. D., Insider Trading and Share Repurchases: Do 
Insiders and Firms Trade in the Same Direction?, 22 J. Corp. Fin. 
35-53 (2013) (``Bonaim[eacute] and Ryngaert (2013)'') (finding that 
repurchases that coincide with net insider selling may be related to 
price support and/or reasons related to option exercises); Cziraki, 
P., Lyandres, E., & Michaely, R., What Do Insiders Know? Evidence 
from Insider Trading Around Share Repurchases and SEOs, 66 J. Corp. 
Fin. 101544 (2021) (``Cziraki et al. (2021)'') (finding that 
``[h]igher insider net buying is associated with better post-event 
operating performance, a reduction in undervaluation, and, for 
repurchases, lower post-event cost of capital. Insider trading also 
predicts announcement returns and long-term abnormal returns 
following events.'' They conclude their results suggest ``insider 
trades before corporate events [repurchases and SEOs] contain 
information about changes both in fundamentals and in investor 
sentiment''); Palladino (2020) (finding increased insider selling in 
quarters where buybacks are occurring); Ahmed, W., Insider Trading 
Around Open Market Share Repurchase Announcements, Working paper, 
University of Warwick (2017) (finding that ``insiders take advantage 
of higher post-[repurchase] announcement price and sell more 
heavily'', and that such selling is predictive of lower long-term 
returns). See also Rulemaking Petition 4-746, at 5 and note 17 
(expressing concern and citing evidence of repurchases used to 
increase share prices at the time when insiders sell shares). See 
also, generally, Edmans, A., Goncalves-Pinto, L., Groen-Xu, M., & 
Wang, Y., Strategic News Releases in Equity Vesting Months, 31(11) 
Rev. Fin. Stud., 4099-4141 (2018) (finding that ``CEOs release 20% 
more discretionary news items in months in which they are expected 
to sell equity, predicted using scheduled vesting months'' and that 
``[t]he increase arises for positive news, but not neutral or 
negative news, nor nondiscretionary news'' and concluding that 
``[n]ews in vesting months generates a temporary increase in stock 
prices and market liquidity, which the CEO exploits by cashing out 
shortly afterwards''; as an important caveat, while the study 
includes buybacks among announcements, and based on other evidence, 
they are generally viewed as positive announcements, the study does 
not provide specific results for buybacks); Edmans, A., Fang, V., & 
Huang, A., The Long-Term Consequences of Short-Term Incentives, J. 
Acct. Res., forthcoming (2021) (finding that ``[v]esting equity is 
positively associated with the probability of a firm repurchasing 
shares'' but that ``it is also associated with more negative long-
term returns over the 2-3 years following repurchases'' and that 
``CEOs sell their own stock shortly after using company money to buy 
the firm's stock, also inconsistent with repurchases being motivated 
by undervaluation''). But see, e.g., Liu and Swanson (2016) (finding 
that ``[c]orporate insiders do not sell from personal stock holdings 
during the price support quarter.''); see also Busch and Obernberger 
(2017) (concluding, with respect to actual share repurchases, that 
price support provided by repurchases improves price efficiency, 
even when manipulation concerns might be highest, such as those that 
occur prior to insider sales). In the case of repurchase 
announcements, where such announcements coincide with earnings 
announcements, because issuers generally prohibit insiders from 
trading in the period leading up to earnings announcements as part 
of blackout periods, insider sales activity after the repurchase 
announcement may be the result of pent-up liquidity demand.
    \82\ Announcement returns are positively related to past insider 
purchases, especially for firms that are priced less efficiently. 
See, e.g., Dittmar & Field (2015) (finding that ``repurchasing firms 
with relatively high net insider buying have significantly lower 
relative repurchase prices'' and concluding that firms with more net 
insider buying repurchase undervalued stock); Babenko, I., 
Tserlukevich, Y., & Vedrashko, A., The Credibility of Open Market 
Share Repurchase Signaling, J. Fin. & Quantitative Analysis 1059-
1088 (2012).; Bonaim[eacute] and Ryngaert (2013) (finding that net 
insider buying reinforces the undervaluation signal conveyed by 
repurchases while net insider selling weakens it); Cziraki et al. 
(2021) (showing that ``pre-event insider trading contains 
information regarding future changes in the cost of capital for 
repurchasing firms''). Setting aside the signaling theory, purchases 
by insiders during an issuer's repurchases if such insiders are in 
possession of material nonpublic information may represent unlawful 
insider trading that may harm other market participants. Similar to 
insiders, issuers that purchase their securities while in possession 
of material nonpublic information may be subject to Rule 10b-5 
liability.
    \83\ Brav et. al. (2005).
    \84\ See, e.g., Dittmar and Field (2015); Ben-Rephael et al. 
(2014). See also infra note 67.
    \85\ See, e.g., Busch and Obernberger (2017); Cook et al. 
(2004); Hillert, A., Maug, E., & Obernberger, S., Stock Repurchases 
and Liquidity, 119(1) J. Fin. Econ. 186-209 (2016).
---------------------------------------------------------------------------

    Presently, information about repurchases, aggregated at the monthly 
level, is provided in periodic reports (quarterly for most filers). 
While issuers may voluntarily announce future repurchase plans 
(typically on Form 8-K), they are not required to do so, nor are they 
required to provide timely updates to investors about incremental 
progress under the previously announced repurchase program. Generally, 
a lack of transparency, comprehensive disclosure, and timely 
information about repurchases may contribute to information asymmetries 
and thus make it harder for investors to value an issuer's securities 
and make informed investment decisions.
    Although some issuers announce details of their repurchase programs 
on a voluntary basis, issuers are not required to do so, or to disclose 
reasons for their repurchases. Further, issuers are not required to 
disclose whether they allow insiders to trade during repurchases. Thus, 
it can be difficult for investors to determine whether the undertaken 
repurchases were efficient and aligned with shareholder value 
maximization, or were at least in part driven by self-interested 
behavior of corporate insiders rather than shareholder interest. The 
last significant change to repurchase reporting was adopted in 2003, 
when the Commission required domestic filers to present

[[Page 8456]]

monthly data on actual repurchases on a quarterly basis in Form 10-Q or 
10-K (registered closed-end funds, on a semi-annual basis in Form N-
CSR, and Form 20-F filers, on an annual basis in Form 20-F). One study 
examined the consequences of this change and found that ``[f]irms 
announce significantly fewer and slightly smaller open market 
repurchase plans in the enhanced disclosure environment,'' however, 
``completion rates (the amount of stock repurchased as a percentage of 
the announced amount) significantly increase.'' \86\ The study further 
states that ``[m]ore conservative announcement strategies and more 
aggressive completion rates are consistent with a decline in false 
signaling . . . open market repurchase announcements are viewed as more 
credible, on average, in the enhanced disclosure environment.'' \87\ 
However, as the study notes, ``[a]s with any analysis based on a 
regulatory change affecting all firms simultaneously, other 
unobservable, macroeconomic trends could have affected repurchase 
behavior.'' \88\
---------------------------------------------------------------------------

    \86\ See Bonaim[eacute] (2015).
    \87\ Id.
    \88\ Id.
---------------------------------------------------------------------------

    A number of foreign jurisdictions require repurchase disclosure of 
greater frequency and timeliness, relative to current U.S. 
requirements. Studies have examined the resulting higher-frequency data 
on repurchase program and how repurchase trades affect investors and 
markets. Studies based on data from France and Hong Kong, which require 
repurchase disclosures at the beginning of the following month and 
following day, respectively, found that repurchases reduced market 
liquidity in periods in which repurchases took place but not in 
response to the disclosures.\89\ These findings are consistent with 
potential adverse selection when a large informed trader (the 
repurchasing issuer) is in the market but do not suggest a negative 
impact from increased disclosure frequency. Other studies of 
disclosures required in Greece, which requires repurchase disclosures 
within seven days, and Hong Kong document that cumulative abnormal 
returns following disclosures of actual share repurchases are greatest 
for smaller firms as well as firms with higher book-to-market ratios. 
These are consistent with the studies finding that repurchase 
announcements may correct market undervaluation and do so especially 
for smaller firms, which may be subject to greater information 
asymmetry.\90\
---------------------------------------------------------------------------

    \89\ See Ginglinger, E. & Hamon, J., Actual Share Repurchases, 
Timing, and Liquidity, 31 J. Banking & Fin. 915-938 (2007), for a 
study of France; and Brockman, P. & Chung, D., Managerial Timing and 
Corporate Liquidity: Evidence from Actual Share Repurchases, 61 J. 
Fin. Econ. 417-448 (2001), for a study of Hong Kong. While the 
authors do not examine empirically the effects of different 
reporting frequencies, they compare their findings with those from a 
foreign regime with a different reporting frequency and extrapolate 
that ``[t]he similarity of our results to the results for the Hong 
Kong market indicates that the choice of whether to require firms to 
disclose repurchases one day versus one month after execution does 
not affect the impact of share repurchases on liquidity''; while the 
study further concludes that this suggests ``that there are limited 
benefits from requiring greater post-trade transparency of share 
repurchases,'' the conclusion that greater disclosure of repurchases 
would have limited benefits, in our view, does not follow from the 
similarity of the effects of repurchases on liquidity in the two 
countries referenced in the study. As a further caveat, there are 
potentially significant comparability issues in evaluating data from 
different jurisdictions, which have varying legal and market 
conditions for repurchases.
    \90\ See Zhang, H., Share Price Performance Following Actual 
Share Repurchases, 29 J. Banking & Fin. 1887-1901 (2005), for a 
study of Hong Kong, and Drousia, A., Episcopos, A., & Leledakis, G., 
74 Q. Rev. Econ. and Fin. 267-277 (2019), for a study of Greece. See 
also Bratli, D. & Rehman, O., The Price Impact and Timing of Actual 
Share Repurchases in Norway, Thesis (2016) (examining Norwegian data 
on daily repurchases and finding a small but positive price impact 
of such repurchases).
---------------------------------------------------------------------------

    While we could not find studies analyzing empirically how the 
introduction of more frequent disclosure affected buybacks in foreign 
countries, we also were not able to find evidence that such disclosure 
requirements adversely affected shareholder value or market 
participants. The broad application of a disclosure requirement to 
issuers in a given jurisdiction makes it hard to formulate an empirical 
setting, such as a quasi-natural experiment, that effectively addresses 
the question of how the introduction of the disclosure affected 
buybacks and issuers that undertake them. Moreover, there are 
potentially significant differences between jurisdictions with respect 
to other repurchase regulations, market structure, taxation, 
composition of the subset of issuers that undertake repurchases, and 
the subset of investors in such issuers, complicating cross-country 
comparisons or extrapolation from international studies to the U.S. 
setting.
    In Sections IV.B and IV.C below we evaluate the anticipated costs 
and benefits of the final rule and the anticipated effects of the final 
rule on efficiency, competition, and capital formation.

B. Benefits

    The proposed disclosure could benefit investors (including existing 
shareholders contemplating a sale or purchasing more securities) by 
enabling them to value the issuer's securities more accurately, 
resulting in better informed investment decisions.\91\ Specifically, 
the proposed daily disclosure of repurchases (compared to the existing 
Form 10-Q and 10-K quarterly disclosure of monthly repurchase activity, 
the semi-annual disclosure on Form N-CSR, and the annual disclosure on 
Form 20-F) could reveal time-sensitive information about the issuer's 
evolving outlook on its future share price to investors in a much 
timelier manner.\92\ To the extent issuers' repurchase decisions tend 
to predict future price changes,\93\ information about the timing of 
recent repurchases could be valuable to investors' decisions to buy and 
sell the issuer's securities. These benefits would be more modest to 
the extent that many issuers already make public announcements of 
repurchase plans, which alleviate some information asymmetries, and 
there is evidence that investors on aggregate draw accurate inferences 
about the likely program completion rate \94\ (although they cannot 
gauge the timing of specific repurchase trades). The benefits would 
further be more modest to the extent that large issuer repurchases 
already have price impact in the absence of a daily disclosure. The 
disclosure could be of greater benefit to market participants that do 
not have the sophistication to uncover large repurchases from other 
trading data. Further, the benefits of repurchase disclosure may be 
lower if issuers restructure their repurchases in a manner intended to 
minimize the information content and associated front-running costs of 
the daily disclosure (see Section IV.C below) in response to the 
proposed disclosure requirement.
---------------------------------------------------------------------------

    \91\ See supra notes 66-68 and preceding, accompanying, and 
following text.
    \92\ Timelier disclosure of repurchases was supported by several 
commenters on the 2016 concept release. See, e.g., letters in 
response to the Concept Release from Klein & Amy (supporting 
reporting of all repurchases on Form 8-K with no de minimis 
threshold); CalPERS (recommending reporting of significant 
repurchases on Form 8-K); AFR (recommending that share repurchases 
should be disclosed at the time that the repurchase occurs). But see 
letters in response to the Concept Release from SIFMA (arguing that 
more frequent reporting would not provide any material information 
to justify the increased cost to registrants and might prejudice a 
registrant's execution of share repurchases). See also Letters from 
Chamber; FedEx; Fenwick; GM; and FEI (generally supporting the 
existing, quarterly frequency of repurchase reporting required in 
Item 703).
    \93\ See supra note 67.
    \94\ See supra note 78.
---------------------------------------------------------------------------

    In addition, the proposed periodic disclosure of the reasons for, 
and the structure of, the issuer's repurchase

[[Page 8457]]

program could improve the ability of investors to assess the optimality 
of the issuer's repurchase policy. The benefits of the information 
about the rationale for repurchases could be limited in cases where 
issuers already provide such disclosures in voluntary repurchase 
program announcements, or if investors are able to infer the purpose of 
repurchases from other public information.\95\ The benefits of the 
information about the rationale for repurchases could be limited if 
such disclosure is boilerplate and provides relatively little 
specificity to investors.\96\
---------------------------------------------------------------------------

    \95\ See, e.g., Bonaim[eacute] (2012) (tabulating, in Table 3, 
evidence on the stated motive of the announced repurchase program 
and program completion rates). The paper finds that ``[f]ew stated 
motives for repurchases affect completion rates. Firms that mention 
undervaluation or general corporate purposes in their announcements 
have significantly lower completion rates, while firms that mention 
extending a prior plan or having a strong cash position have 
significantly higher completion rates on average. With the above 
exceptions, completion rates depend more on what issuers are doing 
(implied motives) than on what they are saying (stated motives).'' 
As a caveat, data obtained from a voluntary regime may not fully 
generalize to the mandatory disclosure of the rationale for 
repurchases under the proposed amendments.
    \96\ In other contexts, see, e.g., Cazier, R., McMullin, J., & 
Treu, J., Are Lengthy and Boilerplate Risk Factor Disclosures 
Inadequate? An Examination of Judicial and Regulatory Assessments of 
Risk Factor Language, 96(4) Acct. Rev. 131-155 (2021) (finding that 
risk factor disclosures often remain ``excessively long and 
boilerplate'', ``lengthier and more boilerplate risk factor 
disclosures are less likely to be considered inadequate under 
judicial and regulatory review,'' and ``when risk factor language is 
assessed as adequate in judicial review, industry peers borrow that 
language more frequently, and that judicial assessments of risk 
factor disclosures prompt industry peers to lengthen their risk 
factor disclosures.''). But see Nelson, K. & Pritchard, A. C., 
Carrot or Stick? The Shift from Voluntary to Mandatory Disclosure of 
Risk Factors, 13(2) J. Empirical Legal Stud. 266-297 (2016) (finding 
that ``[f]irms subject to greater litigation risk disclose more risk 
factors, update the language more from year to year, and use more 
readable language than firms with lower litigation risk,'' and while 
``[t]hese differences in the quality of disclosure are pronounced in 
the voluntary disclosure regime, [they] converge following the SEC 
mandate as low-risk firms improved the quality of their risk factor 
disclosures.''); Campbell, J., Chen, H., Dhaliwal, D., Lu, H., & 
Steele, L. B., The Information Content of Mandatory Risk Factor 
Disclosures in Corporate Filings, 19 Rev. Acct. Stud. 396-455 (2014) 
(finding that ``firms facing greater risk disclose more risk factors 
. . . managers provide risk factor disclosures that meaningfully 
reflect the risks they face . . . [and that] the information 
conveyed by risk factor disclosures is reflected in systematic risk, 
idiosyncratic risk, information asymmetry, and firm value'').
---------------------------------------------------------------------------

    In some cases, incentives for value-destroying or opportunistic 
repurchases may exist, as discussed in detail in Section IV.A.2 above. 
To the extent that some repurchases are inefficient, the additional 
transparency about repurchases under the proposed amendments could 
reduce such opportunistic uses of buybacks. The daily disclosure of 
repurchases, combined with other existing disclosures (e.g., dates and 
terms of compensation awards, dates of insider trades, dates and 
details of earnings announcements and earnings forecasts), could 
improve the ability of investors to identify those instances of 
repurchases that may be driven by managerial self-interest (e.g., 
increasing the share price prior to an insider's sale, meeting a 
threshold in the compensation arrangement, or meeting/beating the 
consensus earnings forecast). Such market scrutiny could mitigate 
agency conflicts associated with repurchases and thereby enhance firm 
value, benefiting shareholders. Further, the proposed additional 
disclosure could make it easier for investors to timely identify 
repurchase announcements potentially motivated by short-term attempts 
to boost the share price (including cases where issuers announce 
repurchase programs but do not follow through), to the extent that 
daily information provides a more complete and timely picture than the 
monthly information presently reported on a quarterly (or for some 
filers, less frequent) basis.
    The use of a structured data language (specifically, Inline XBRL) 
for the repurchase disclosures under the proposed amendments would 
enable automated extraction of granular data on issuers' repurchase 
programs and actual repurchases, which could allow investors, 
information intermediaries, and other market participants to 
efficiently perform large-scale analyses and comparisons of repurchases 
across issuers and time periods. Structured data on repurchases could 
also be efficiently combined with other information available in a 
structured data language in corporate filings (e.g., information on 
insider sales and purchases of securities) and with market data 
contained in external machine-readable databases (e.g., information on 
daily share prices and trading volume). The use of a structured data 
language could also enable considerably faster analysis of the 
disclosed data by investors and other market participants. The use of a 
new form for the daily disclosure of repurchase information could on 
the margin benefit investors manually reviewing repurchase filings of 
an individual issuer or a handful of issuers, relative to the reporting 
of such daily disclosure on an existing form (such as Form 8-K), by 
making the repurchase information relatively more salient and easier to 
find among an issuer's filings. However, in cases where investors 
extract structured data underlying the disclosure, the use of a new 
form versus adding structured data to an existing form is unlikely to 
have a meaningful effect.
    The proposed requirements 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, as well as the proposed disclosure of 
whether any officer or director reporting pursuant to Section 16(a) of 
the Exchange Act purchased or sold shares or other units of the class 
of the issuer's securities that is the subject of an issuer share 
repurchase plan or program within 10 business days before or after the 
issuer's announcement of an issuer purchase plan or program, could also 
benefit investors. This information could help investors better 
interpret repurchase program announcements and disclosures of actual 
repurchase activity in formulating projections of an issuer's future 
share price. As one example, a lack of restrictions on insider selling 
during repurchases, alongside historical disclosures of insider 
selling, could help investors gauge whether a future repurchase 
announcement, or actual repurchases, may be motivated by price support 
for insiders' sales of their securities, rather than conveying a true 
signal of undervaluation or efficiently disbursing excess cash.\97\ The 
magnitude of these benefits may be more limited to the extent that past 
insider selling activity, disclosed on beneficial ownership filings, 
around past repurchases, could be sufficiently representative of future 
insider selling behavior in such circumstances, even in the absence of 
a disclosure of restrictions. The magnitude of these benefits of 
reduced information asymmetry may further be limited to the extent that 
the existing repurchase and disclosure practices already sufficiently 
provide for price efficiency.\98\ Besides providing information to 
investors, and thus enabling better informed investment decisions, the 
proposed disclosure requirements might also significantly affect the 
underlying behavior of insiders and issuers by drawing scrutiny of 
investors and market participants to insider selling during 
repurchases, potentially disincentivizing announcements of repurchases 
and actual repurchases

[[Page 8458]]

motivated by price support for insider selling, to the extent such 
activity exists, instead of shareholder value maximization.\99\ The 
benefits of the disclosure of whether any officer or director has 
purchased or sold securities of the issuer around the repurchase 
announcement may be small to the extent the investors can obtain the 
same information from existing Section 16 beneficial ownership 
disclosures and public announcements of repurchases.
---------------------------------------------------------------------------

    \97\ See supra note 80.
    \98\ For example, one recent study shows that price support 
provided by actual share repurchases contributes to improved price 
efficiency, even when manipulation concerns might be highest, such 
as those that occur prior to insider sales. See Busch and 
Obernberger (2017).
    \99\ Studies have found evidence that changes in mandatory 
disclosure affect behavior. See, e.g., Chuk, E. C., Economic 
Consequences of Mandated Accounting Disclosures: Evidence from 
Pension Accounting Standards, 88(2) Acct. Rev. 395-427 (2013); 
Bonaim[eacute] (2015).
---------------------------------------------------------------------------

    We expect the proposed amendments to have positive effects on 
efficiency and capital formation. In particular, any decrease in the 
information asymmetry between issuers and investors about the value of 
an issuer's securities as a result of the disclosure could lead to more 
informationally efficient prices, and more efficient capital allocation 
in investor portfolios. Decreased information asymmetries between 
investors and issuers as a result of the enhanced disclosure under the 
proposed amendments could also incrementally facilitate capital 
formation and reduce the cost of capital.\100\ It is difficult to 
determine the incremental contribution of the proposed amendments and 
thus the magnitude of this potential benefit.
---------------------------------------------------------------------------

    \100\ See, e.g., Easley, E. & O'Hara, M., Information and the 
Cost of Capital, 59(4) J. Fin. 1553-1583 (2005); Botosan, C., 
Disclosure and the Cost of Capital: What Do We Know?, 36 Acct. & 
Bus. Research 31-40 (2006) (stating that ``[t]he overriding 
conclusion of existing theoretical and empirical research is that 
greater disclosure reduces cost of capital''); Lambert, R., Leuz, 
C., & Verrecchia, R., Accounting Information, Disclosure, and the 
Cost of Capital, 45(2) J. Acct. Research 385-420 (2007) (showing, in 
a conceptual framework, that ``increasing the quality of mandated 
disclosures should in general move the cost of capital closer to the 
risk-free rate'' and ``generally reduce the cost of capital for each 
firm in the economy'' and further noting that ``the benefits of 
mandatory disclosures are likely to differ across firms.''); 
Accelerated Filer and Large Accelerated Filer Definitions, Rel. No. 
34-88365 (Mar. 12, 2020) [85 FR 17178 (Mar. 26, 2020)], at 17215, 
note 477.
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C. Costs

    The proposed disclosure would impose costs on issuers (and 
therefore existing shareholders). Such costs would include direct 
(compliance-related) costs to compile and report daily repurchase data, 
as well as to provide additional disclosure, such as a description of 
the rationale and structure of the repurchase program (including 
reliance on Rule 10b-18 and pursuant to a plan that is intended to 
satisfy the affirmative defense conditions of Rule 10b5-1(c)).\101\ The 
aggregate direct costs of compliance would be potentially significant 
and would be largest for issuers that repurchase more frequently and 
thus have to provide more disclosures. The direct costs of compliance 
with the daily disclosure requirement on Form SR could be partly 
alleviated by the provision that such disclosure would be furnished, 
rather than filed, which could result in an incrementally smaller legal 
cost of the new disclosure.\102\ It is difficult to quantify how 
significantly the proposed timing of the daily disclosure requirement 
with respect to the timing of trade settlement (i.e., daily disclosure 
within one day of trade execution, which would be prior to the 
settlement of the trade, as opposed to after trade settlement) would 
affect direct compliance costs. As proposed, issuers would have one 
business day from the trade execution to report repurchases. Thus, 
issuers would likely have fairly complete data based on trades that 
have been executed, although the disclosure would be required in most 
cases before trades have settled (since settlement typically occurs two 
business days after the trade execution). Where material changes occur 
after settlement, issuers would incur a cost to file an amended Form 
SR. In addition, issuers that do not presently gather and aggregate 
repurchase information on a daily basis, outside of the financial 
reporting cycle, would incur costs to implement such systems and 
processes.
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    \101\ See Section V for a detailed description of the estimated 
burden of the proposed disclosure requirements for purposes of the 
Paperwork Reduction Act.
    \102\ See, e.g., Pay Ratio Disclosure, Rel. No. 33-9877 (Aug. 5, 
2015) [80 FR 50103 (Aug. 18, 2015)], at 50177; Interactive Data to 
Improve Financial Reporting, Rel. No. 33-9002 (Jan. 30, 2009) [74 FR 
6775 (Feb. 10, 2009], at 6794; and Selective Disclosure and Insider 
Trading, Rel. No. 33-7881 (Aug. 15, 2000) [65 FR 51715 (Aug. 24, 
2020)], at 51723.
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    The proposed requirement to report the additional quantitative 
repurchase disclosure on a new form will impose costs. Issuers will 
likely incur an initial upfront cost to train counsel or retain an 
outside service provider to assist with the preparation of the new 
form. On an ongoing basis, holding the scope of the disclosure and 
affected filers unchanged, we expect the direct costs of filing the 
data on a new form to be very similar to the direct costs of filing the 
data on an existing form (such as Form 8-K).
    The proposed requirement to use a structured data language for 
reporting the repurchase disclosure will impose incremental compliance 
costs on issuers. Such costs are expected to be modest as issuers 
affected by the amendments (including small and foreign filers) already 
are required to, or would be required to (in the case of certain 
closed-end funds--no later than February 2023 \103\), use Inline XBRL 
to comply with other disclosure obligations. Moreover, the scope of the 
disclosure proposed to be reported using a structured data language is 
limited and would thus likely require a relatively simple taxonomy of 
additional tags, minimizing initial and ongoing costs of complying with 
the proposed tagging requirement.
---------------------------------------------------------------------------

    \103\ See supra note 51 and accompanying text.
---------------------------------------------------------------------------

    The proposed qualitative disclosure requirements would also result 
in compliance costs for issuers. While issuers are likely to have most 
of the additional information readily available, these disclosures 
would require additional time of counsel and/or management to 
characterize the rationale for the repurchase program, and the 
program's structure, in the periodic report. The proposed requirement 
to disclose whether any Section 16 officer or director purchased or 
sold securities in the 10 business day before or after a repurchase 
announcement would involve costs associated with collecting information 
from Section 16 reporting officers and directors, in reliance on their 
Section 16 filings and/or representations about their trading activity.
    The proposed requirements would also impose indirect costs. A key 
indirect cost of daily disclosure (proposed to be required one business 
day after the repurchase trade is executed) is that it may cause the 
stock price to rise more than it would absent such disclosure, making 
additional purchases more costly. These costs would be borne by the 
issuer and therefore its shareholders, but would be mitigated for 
shareholders selling part of their position. The reason that disclosure 
might have this effect is it could reveal the issuer's plans to 
repurchase additional stock to outside investors (to the extent 
repurchases are taking place over multiple days), as well as the 
issuer's positive outlook on the stock price (to the extent that 
participants infer this is a motivation for the repurchase).\104\ This 
cost to issuers

[[Page 8459]]

would be a wealth transfer to other market participants, which would 
have otherwise been less informed about the issuer's outlook on its 
future share price. The magnitude of such costs would vary across 
issuers and could evolve if issuers restructure their repurchase 
programs in an effort to minimize the price impact associated with the 
proposed disclosure requirement. For example, issuers that conduct open 
market repurchases over multiple days on a highly predictable periodic 
schedule (such as under a Rule 10b5-1 or a similar trading plan, or 
that conduct recurring trades outside of a trading plan) may face a 
higher cost of this type. Conversely, issuers that conduct open market 
repurchases over a period of only a couple of days, or over a longer 
period of time but at highly irregular intervals, or in irregular 
amounts (e.g., a series of smaller repurchases followed by a large 
repurchase day), may see lower costs of this type from the proposed 
disclosure requirement. However, issuers that bunch large repurchases 
into a compressed time period would likely experience greater price 
impact from large trades, and issuers that rely on the Rule 10b-18 safe 
harbor would also be limited by the safe harbor's provisions in the 
volume of daily repurchase activity. Further, issuers that conduct one-
time repurchases outside the open market (such as in a privately 
negotiated transaction, as an accelerated share repurchase, or as a 
tender offer) may be less subject to these costs because the trade 
would be required to be reported after it is executed, and it would 
typically be executed at once. To the extent that repurchases convey 
information even in the absence of disclosure, if issuers were to limit 
repurchases due to cost, price efficiency may be reduced. To the extent 
that repurchases add liquidity in the absence of disclosure, limiting 
repurchases might also reduce liquidity.
---------------------------------------------------------------------------

    \104\ This cost could be more pronounced for repurchases under a 
Rule 10b5-1(c) plan to the extent that such repurchases exhibit a 
greater degree of periodicity and occur over a period of time, 
enabling market participants to predict future repurchases to a 
greater extent based on historical daily data. To the extent that 
more timely disclosure enables some other investors to purchase 
securities before the issuer completes the repurchase program, thus 
potentially at a lower price than they would have otherwise, those 
other investors may benefit from being able to front-run the 
issuer's trades.
---------------------------------------------------------------------------

    Another potential indirect cost of the proposed disclosure is the 
risk of sharing sensitive information with competitors. It is unlikely 
that the rationale behind repurchases would reveal such proprietary 
information, above and beyond other disclosures about the business and 
financial condition of the issuer. Thus, we expect such costs to be 
relatively modest.
    A further indirect cost of the proposed disclosure is the 
possibility of the proposed disclosure requirements leading issuers to 
deviate from an optimal payout policy (resulting in a negative effect 
on efficiency). For example, the described costs of the proposed 
disclosure might discourage some issuers from repurchases that would 
otherwise be optimal for shareholder value (e.g., as a more flexible 
and tax-efficient method of payout compared to dividends). Issuers 
might instead overweigh dividends or reduce overall corporate payouts 
and inefficiently retain excess cash within the firm. Further, if the 
costs of the proposed disclosure requirements cause issuers to decrease 
overall payouts, even if issuers lack positive-net present value 
investment opportunities, it would limit the ability of investors to 
efficiently reallocate cash to other, higher-net present value 
investment opportunities, potentially resulting in inefficiencies in 
the aggregate allocation of capital across issuers.
    The described direct and indirect costs of the proposed disclosure 
for the affected issuers would decrease shareholder value and would 
thus be passed on to the issuer's existing shareholders (that do not 
sell securities during the repurchase).
    The proposed disclosure requirements could also affect financial 
intermediaries involved in executing repurchases on behalf of issuers. 
Such intermediaries are likely to incur additional costs of 
consolidating information about repurchase trades on a daily basis for 
the issuer. Such information should be relatively readily available, 
thus direct costs could be incremental. Financial intermediaries may 
also incur indirect costs of the proposed requirements. Specifically, 
to the extent the proposed disclosure requirements lead to a decrease 
in repurchases, financial intermediaries may see a decrease in orders, 
resulting in lower revenue.
    Some of the proposed disclosure requirements may also impose costs 
on corporate insiders. In particular, the requirement that issuers 
publicly disclose whether they have policies and procedures related to 
purchases and sales by officers and directors during repurchases, as 
well as the proposed disclosure of whether any officer or director 
reporting pursuant to 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 10 business days before or after the issuer's 
announcement of such repurchase plan or program, could cause issuers to 
increasingly adopt such restrictions in anticipation of the market 
scrutiny following such disclosure. The incremental costs of the 
requirement to disclose whether any officer or director reporting 
pursuant to Section 16(a) of the Exchange Act purchased or sold 
securities around the repurchase announcement may be small to the 
extent the investors can already obtain the same information from 
beneficial ownership disclosures and public announcements of 
repurchases. Any restrictions an issuer imposes on officer and director 
trading could limit the ability of corporate insiders to purchase or 
sell securities at issuers that conduct repurchases periodically over 
an extended period of times (such as open market repurchases under a 
multi-quarter program, or a Rule 10b5-1 plan). To the extent any new 
such restrictions limit insider sales, they could significantly 
decrease the liquidity of insiders' holdings of an issuer's securities, 
including securities obtained from equity-based executive compensation 
(which may in turn potentially lead insiders to attempt to reduce their 
equity exposure and negotiate more cash compensation, or negotiate 
larger compensation to compensate for the decreased liquidity). To the 
extent that the proposed requirement to disclose whether any officer or 
director has purchased or sold securities around the repurchase 
announcements leads some companies whose officers or directors trade 
securities within the specified period to forgo making a repurchase 
announcement to limit market scrutiny, the amount of information 
available to investors about companies' forward-looking repurchase 
plans could decrease.
    To the extent that the proposed requirements affect small filers to 
a greater extent than large filers, they could result in adverse 
effects on competition. The fixed component of the legal costs of 
preparing the disclosure could be one contributing factor. The lower 
liquidity of smaller issuers' securities,\105\ which could exacerbate 
the price impact of the proposed disclosure, could be another

[[Page 8460]]

factor contributing to the disproportionate effects of the disclosure 
on smaller filers. The latter effect could be mitigated by the lower 
incidence, and the lower average level (relative to issuer size), of 
repurchases among small issuers.\106\
---------------------------------------------------------------------------

    \105\ See, e.g., Amihud, Y. & Mendelson, H., Liquidity and Stock 
Returns, 42(3) Fin. Analysts J. 43-48 (1986) (noting that ``[t]he 
stocks of small firms suffer from market `thinness,' which impairs 
their liquidity''.); Duarte, H., and Young, L., Why is PIN priced?, 
91(2) J. Fin. Econ. 119-138 (2009) (in Table 6, showing that larger 
firm size is correlated with higher liquidity based on different 
measures); Collver, C., A Characterization of Market Quality for 
Small Capitalization US Equities, September 2014, available at 
https://www.sec.gov/files/marketstructure/research/small_cap_liquidity.pdf (2014) (finding that ``[s]mall cap stocks 
had larger quoted and effective spreads and traded much lower 
volumes than mid cap stocks'' and that ``[l]iquidity improved with 
market capitalization'').
    \106\ See, e.g., Dittmar, A., Why Do Firms Repurchase Stock, 
73(3) J. Business 331-355 (2000) (finding that ``large firms are the 
dominant repurchasers''); Cheng et al. (2015) (showing in Table 2 
that repurchasing firms are significantly larger than 
nonrepurchasing firms); Jiang, Z., Kim, K. A., Lie, E., and Yang, 
S., Share Repurchases, Catering, and Dividend Substitution, 21 J. 
Corp. Fin., 36-50 (2013) (showing in Table 5 that firm size is 
positively related to the fraction of outstanding share purchase by 
firms on a monthly basis).
---------------------------------------------------------------------------

D. Reasonable Alternatives

    We could propose to increase the frequency of repurchase disclosure 
compared to existing Item 703, but implement a lower frequency compared 
to the proposal (e.g., monthly or weekly disclosure), instead of 
requiring daily disclosure. Compared to the proposal, requiring less 
frequent reporting would provide investors with less timely information 
about daily issuer purchases. Compared to the baseline, such an 
alternative would still benefit investors by enabling them to perform 
more timely and in-depth retrospective evaluation of an issuer's 
repurchase activity, independently or in conjunction with other 
disclosures (e.g., financial condition, risk factors, other corporate 
events, executive compensation, governance, and insider ownership 
disclosures) and gauge the extent to which recent repurchases, 
conducted at the specific point in time, were likely to be aligned with 
shareholder value maximization (as opposed to potential insider self-
interest or other reasons), potentially informing future investment 
decisions. However, such benefits would be smaller than the benefits of 
the daily disclosure under the proposal, to the extent that information 
about actual repurchase is of a time-sensitive nature. In turn, while 
weekly or monthly reporting would increase issuer costs compared to the 
baseline, the additional cost is likely to be less significant than the 
cost of the daily disclosure under the proposal (particularly, with 
respect to the indirect costs considered in Section IV.C above).
    We could also propose a different timing requirement for the 
reporting of daily repurchases (e.g., more or fewer days after the 
repurchase). We are proposing that issuers report a daily summary of 
repurchase transactions within one business day following the trade. As 
two alternatives, we could require reporting within one business day 
after settlement (which typically occurs within two days following the 
trade), or allow issuers up to four business days to report on daily 
repurchases (consistent with the typical requirement for a Form 8-K). 
Generally, a longer time lag for filing the repurchase form would 
provide investors with less timely information about issuer purchases. 
In turn, it would also decrease costs for issuers described above 
compared to the proposal. In particular, the alternative of requiring 
daily reporting within one business day of the settlement could provide 
relatively timely information to investors, but it could also decrease 
costs for issuers and financial intermediaries that may lack final 
repurchase information until after settlement (to the extent that such 
costs are not already alleviated by the furnished, rather than filed, 
nature of the daily disclosure).
    We could modify the scope of the proposed disclosure, for instance, 
omitting information about the use of Rule 10b-18 and/or Rule 10b5-1 in 
the proposed quantitative disclosure, or about any policies and 
procedures relating to purchases and sales of the issuer's securities 
by officers and directors during repurchases, including any 
restrictions on such transactions. Compared to the proposal, narrowing 
the scope of the required disclosure would reduce the costs to issuers 
that use these provisions to execute repurchases. However, this 
alternative would also provide less information to investors and result 
in greater information asymmetry, compared to the proposal. The effects 
of the alternative of omitting Rule 10b5-1 repurchase disclosures 
compared to the proposal could be partly mitigated if the Commission 
adopts additional disclosure requirements for insider and issuer Rule 
10b5-1 plans under new Item 408 of Regulation S-K, which the Commission 
is proposing in a separate release.\107\
---------------------------------------------------------------------------

    \107\ See Rule 10b5-1 Proposing Release.
---------------------------------------------------------------------------

    As another alternative, we could preserve the existing frequency of 
repurchase disclosure but require greater granularity of the disclosure 
(e.g., including daily detail in Forms 10-Q, 10-K, 20-F, and N-CSR). 
This would allow the investors to retrospectively evaluate the 
optimality of repurchases at a granular level. However, compared to the 
proposal, less frequent reporting would provide investors with 
significantly less timely information about issuer purchases and thus 
the outlook on its future share price, resulting in less information 
asymmetry resolution. In turn, less frequent disclosure would also 
decrease the costs for issuers compared to the proposal.
    We could provide exemptions from all, or some of the proposed 
disclosure requirements for smaller filers. As another alternative, we 
could provide a de minimis exemption to issuers whose repurchases are 
below a certain threshold. These alternatives could reduce the 
aggregate costs of the rule but also reduce the information available 
to investors, compared to the proposal. The economic effects of the 
alternative of excluding small filers are uncertain to the extent that 
the effects of the proposed disclosure on small filers are somewhat 
ambiguous. On the one hand, smaller issuers are more likely to be 
affected by the costs of additional disclosure, all else equal (holding 
constant the disclosure burden). On the other hand, smaller issuers are 
less likely to have repurchases,\108\ which would limit the incremental 
burden of additional reporting under the proposed amendments for each 
small filer. Further, to the extent that small filers have relatively 
high information asymmetries because of lower analyst and institutional 
coverage, disclosure about their repurchases may be relatively more 
informative to investors.
---------------------------------------------------------------------------

    \108\ See supra note 107 and accompanying text.
---------------------------------------------------------------------------

    As another alternative, we could provide exemptions or different 
requirements for foreign private issuers and/or registered closed-end 
funds. These alternatives would eliminate or reduce the costs for the 
affected issuers but also reduce the information benefits for investors 
in these issuers, compared to the proposal. For example, registered 
closed-end funds, in general, repurchase their shares less frequently 
than corporate issuers,\109\ and not all of the motivations for 
corporate issuer share repurchases will apply to registered closed-end 
funds because of differences in the business model and organizational 
structure of a fund as compared to an operating company. Abuses can 
nevertheless occur when a registered closed-end fund engages in 
repurchases of its shares, including attempts to create an appearance 
that the value of the shares was steady or rising in an effort to 
influence the market to aid in the distribution of new shares or to 
manipulate the market value of securities involved in exchanges. A lack 
of disclosure would make it more difficult for investors to determine 
the extent to which the share price was being driven by such actions

[[Page 8461]]

of the fund's management.\110\ Thus, we believe that investors would 
benefit from receiving timely details about a fund's repurchase 
activity so they can make an informed decision as to whether they 
believe the fund's share price has been influenced by this repurchase 
activity, which is difficult to do using the semi-annual reports on 
Form N-CSR. Exempting or providing different requirements for foreign 
private issuers may place them at a relative competitive advantage to 
domestic issuers. Further, it would reduce the amount of information 
available to investors, potentially reducing their ability to make 
informed investment decisions, compared to the proposal. The aggregate 
effects of these alternatives may be incremental as such issuers engage 
in relatively few repurchases as seen in Section IV.A.1 above.
---------------------------------------------------------------------------

    \109\ See supra note 35.
    \110\ See, e.g., Investment Trusts and Investment Companies, pt. 
3, H.R. Doc. No. 279, 76th Cong., 1st Sess. (1939) and Division of 
Investment Management, Protecting Investors: A Half Century of 
Investment Company Regulation (1992), available at https://www.sec.gov/divisions/investment/guidance/icreg50-92.pdf.
---------------------------------------------------------------------------

    We could modify some of the elements of implementation of the 
proposed disclosure requirements. For example, we could propose an 
additional requirement that a summary of daily disclosures be filed as 
an exhibit to the periodic report. This alternative could slightly 
decrease investor costs of retrieving and consolidating daily 
information from Form SR, compared to the proposal (because the 
consolidation of daily disclosures into a time series for the periodic 
report could require small, but not zero effort, particularly for 
investors that are not performing large-scale automated extraction of 
data on multiple issuers but are reviewing repurchase disclosure for 
one or a handful of issuers). This alternative also would impose 
incremental costs on filers, compared to the proposal (because the 
aggregation of such information from prior daily filings for an exhibit 
to a periodic report is likely to have a small, but not zero cost). As 
an alternative, we could require the daily disclosure to be reported on 
Form 8-K (and subject issuers that do not typically report on this 
form, such as registered closed-end funds, to this requirement) or 
another existing form rather than on the new form, as proposed. This 
alternative could incrementally lower the initial transition cost for 
filers, compared to the proposal. At the same time, this alternative 
could make it incrementally harder for investors to parse out the daily 
repurchase disclosure from other current events, compared to the 
proposed use of a dedicated form. For filers that would be subject to 
the daily disclosure requirement under this alternative, this 
alternative is unlikely to impact ongoing disclosure costs, or benefits 
for investors, relative to the proposal. We are retaining the existing 
requirement to provide monthly breakdowns of repurchase activity in 
periodic reports. As an alternative, we could remove this requirement, 
and let it be superseded by the new daily disclosures. The costs and 
benefits of this alternative compared to the proposal are likely to be 
fairly incremental because aggregation of daily disclosures into a 
monthly breakdown is likely to be low-cost for filers, and of 
relatively little incremental importance to investors. Removing this 
information under this alternative could on the margin increase 
information costs for the subset of investors that only seek monthly 
information about repurchases and would in that case have to newly 
aggregate daily information from Form SR to reproduce the monthly 
figures.
    As another alternative, we could scale the structured disclosure 
requirements compared to the proposal, for instance, by not requiring 
that the footnote disclosure in periodic reports, or the narrative 
disclosure of buybacks, be structured. These alternatives could 
incrementally increase the cost of the extraction and analysis of 
additional information about the structure and purpose of repurchase 
programs, compared to the proposal. At the same time, the incremental 
cost savings for issuers, compared to the proposal, would likely be 
modest since affected filers already tag various other disclosures in 
their filings with the Commission.\111\
---------------------------------------------------------------------------

    \111\ See 17 CFR 232.405(b) (setting forth structured disclosure 
requirements for, inter alia, operating companies and closed-end 
management investment companies).
---------------------------------------------------------------------------

Request for Comment
    29. Do investors currently have sufficient information about 
issuers' repurchases to make an informed assessment of such repurchases 
and their effects on the future share price? In what areas, if any, is 
existing disclosure lacking such that it is limiting investor ability 
to make informed investment decisions? Would the proposed disclosure 
decrease any such information gaps?
    30. Is existing disclosure about repurchases sufficient to enable 
investors to assess whether the issuer or its insiders are engaged in 
self-interested or otherwise inefficient repurchases? Is such 
inefficient repurchase behavior common today? Would the proposed 
amendments sufficiently address any disclosure gaps? Would the proposed 
amendments decrease the likelihood of inefficient repurchase decisions?
    31. How would investors benefit from the proposed new disclosure of 
daily repurchases? Would investors benefit from the proposed 
requirement to disclose additional detail about the number of shares 
repurchased on the open market, the number of shares repurchased in 
reliance on the safe harbor in Rule 10b-18, and the number of shares 
repurchased pursuant to a plan intended to satisfy the affirmative 
defense conditions of Rule 10b5-1(c)? Would investors benefit from a 
more streamlined disclosure, including some but not all of the proposed 
columns, or including only the total number of shares repurchased on a 
daily basis?
    32. How would the proposed requirement to disclose daily 
repurchases affect issuers? What costs could issuers incur as a result 
of the proposed daily disclosures? Are issuers likely to incur front-
running costs? How would the proposed timing of the new daily 
disclosures (one business day after the trade) affect issuers? In what 
ways could the proposed disclosure requirements be modified to mitigate 
costs to issuers?
    33. Would investors benefit from alternative disclosure and 
reporting frequencies? For example, would the disclosure remain 
beneficial to investors if the daily repurchase filing were allowed to 
be made with a longer time lag, such as one or more business days after 
settlement? Alternatively, would reporting a summary of daily 
repurchase activity on a weekly, monthly, or quarterly basis provide 
valuable information to investors? Further, would reporting repurchase 
activity on a weekly or monthly basis still be beneficial to investors? 
Would the described alternatives result in a smaller increase in 
disclosure costs for issuers? Which alternative reporting frequency 
would be most beneficial in the case of foreign private issuers that 
presently report repurchases on an annual basis on Form 20-F and 
registered closed-end funds that presently report repurchases on a 
semi-annual basis on Form N-CSR?
    34. How would investors benefit from the proposed qualitative 
disclosure requirements, including the rationale for, and the structure 
of, an issuer's repurchase program? Would investors benefit from the 
proposed new disclosure of any policies and procedures relating to 
purchases or sales

[[Page 8462]]

of an issuer's securities by officers and directors during the pendency 
of a share repurchase plan or program? How would investors benefit from 
the proposed new checkbox disclosure of whether any officer or director 
reporting pursuant to Section 16(a) of the Exchange Act has 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 10 business days before or after the issuer's 
announcement of such repurchase plan or program? What are the 
anticipated costs of those requirements for issuers? In what ways could 
those requirements be streamlined to decrease costs to issuers, while 
still providing valuable information to investors? Would shareholders 
be disadvantaged by the disclosures, as proposed, and attendant costs?
    35. Would investors benefit from different qualitative disclosure 
requirements? If so, which ones? What would be the costs of such 
alternatives for issuers?
    36. Would investors benefit from the proposed requirement to use a 
structured data language for the repurchase disclosures? What would be 
the costs of the proposed requirement to issuers? Should we consider 
alternative structured disclosure requirements for repurchase 
disclosure, and what would be their benefits and costs?
    37. Would investors benefit from an additional requirement to 
compile the daily repurchase information in an exhibit to periodic 
reports, in addition to reporting this information on new Form SR? What 
would be the costs of such an alternative to issuers?
    38. Would investors benefit from keeping the existing monthly 
disclosure in the body of the periodic report, in addition to the 
reporting of daily data on a new form? Would issuers realize cost 
savings if we eliminated the current Item 703 requirement to provide a 
monthly breakdown of repurchase activity?
    39. What are the costs and benefits of requiring the reporting of 
daily data on new Form SR, as opposed to on Form 8-K or another 
existing form?
    40. Would the proposed disclosure requirements have 
disproportionate effects on certain categories of issuers? How could 
such effects be mitigated? Should we exempt some issuers-for example, 
smaller reporting companies, issuers with few repurchases, registered 
closed-end funds, foreign private issuers-from all or some of the 
proposed requirements? What would be the effects of such exemptions on 
investors' ability to make informed investment decisions?

V. Paperwork Reduction Act

A. Summary of the Collection of Information

    Certain provisions of our rules and forms that would be affected by 
the proposed amendments contain ``collection of information'' 
requirements within the meaning of the Paperwork Reduction Act of 1995 
(``PRA'').\112\ The Commission is submitting the proposed amendments to 
the Office of Management and Budget (``OMB'') for review in accordance 
with the PRA.\113\ The hours and costs associated with preparing and 
filing the forms constitute reporting and cost burdens imposed by each 
collection of information. An agency may not conduct or sponsor, and a 
person is not required to comply with, a collection of information 
unless it displays a currently valid OMB control number. Compliance 
with the information collections is mandatory. Responses to the 
information collections are not kept confidential and there is no 
mandatory retention period for the information disclosed. The titles 
for the affected collections of information are:
---------------------------------------------------------------------------

    \112\ See 44 U.S.C. 3501 et seq.
    \113\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
---------------------------------------------------------------------------

     ``Form 10-K'' (OMB Control No. 3235-0063);
     ``Form 10-Q'' (OMB Control No. 3235-0070);
     ``Form 20-F'' (OMB Control No. 3235-0288);
     ``Form N-CSR'' (OMB Control No. 3235-0570); and
     ``Form SR'' (a proposed new collection of information).
    We adopted the existing forms pursuant to the Exchange Act and 
Investment Company Act and are proposing the new form pursuant to the 
Exchange Act. The forms set forth the disclosure requirements for 
periodic reports filed by issuers to help investors make informed 
investment and voting decisions. A description of the proposed 
amendments, including the need for the information and its proposed 
use, as well as a description of the likely respondents, can be found 
in Section II above, and a discussion of the economic effects of the 
proposed amendments can be found in Section IV above.

B. Summary of the Estimated Burdens of the Proposed Amendments on the 
Collections of Information

1. Estimated Paperwork Burden for Proposed Form SR
    The following table summarizes the estimated paperwork burden 
associated with proposed new Form SR that affected issuers of equity 
securities registered under Section 12 of the Exchange Act would use to 
disclose a repurchase of their equity shares.

        PRA Table 1--Estimated Paperwork Burden of Proposed Form
------------------------------------------------------------------------
                                                       Brief explanation
          Affected form            Estimated burden      of estimated
                                                            burden
------------------------------------------------------------------------
New Form SR.....................  A new burden of     This burden is the
                                   1.5 hours for       estimated effect
                                   each Form SR.       of compiling the
                                                       data elements,
                                                       tagging the data
                                                       using Inline
                                                       XBRL, and
                                                       preparing and
                                                       submitting the
                                                       Form SR.
------------------------------------------------------------------------

    We estimate a burden of approximately 1.5 hours for each Form SR. 
The burden includes the effect of compiling the six required data 
elements for each date that the form is required, tagging the data 
using Inline XBRL, and preparing and submitting the Form SR. Our 
proposed 1.5 hour estimate is for the average burden over the first 
three years of reporting. We acknowledge that preparation of Form SR 
may initially entail a higher burden as issuers get accustomed to 
collecting data for, and preparing the new form, but we believe that 
the burden would be reduced with subsequent filings.
---------------------------------------------------------------------------

    \114\ See supra notes 56-57 and surrounding text.
---------------------------------------------------------------------------

    Based on data from Compustat and EDGAR filings for fiscal year 
2020,\114\ we estimate that approximately 3,400 issuers that conducted 
share repurchases during fiscal year 2020 would be affected by the 
proposed new Form SR requirement (among them, approximately 250 foreign 
private issuers who reported share repurchases on Form 20-F and 100 
registered closed-end funds who reported share repurchases on Form N-
CSR). We additionally note that most issuers that conduct share 
repurchases do so over a

[[Page 8463]]

period of time, rather than by making a single purchase or a few 
isolated purchases during the year. We conservatively estimate that 
issuers conducting share repurchases would purchase shares one day a 
week for the entire year, resulting in 52 Form SR filings per year. 
Based on the staff's findings relating to the number of issuers 
conducting share repurchases and the estimate of the frequency of 
repurchases, we estimate 176,800 Form SR filings per year.
2. Estimated Paperwork Burdens of the Proposed Amendments to Periodic 
Reports
    The following table summarizes the estimated paperwork burdens 
associated with the proposed amendments to the affected forms filed by 
issuers of equity securities registered under Section 12 of the 
Exchange Act.

    PRA Table 2--Estimated Paperwork Burden of Proposed Amendments to
                            Periodic Reports
------------------------------------------------------------------------
Amendments to Reg. S-K Item 703,
Form 20-F and Form N-CSR, Reg. S-  Estimated burden    Brief explanation
   T Rule 405 and Proposed New         increase          of  estimated
    Exchange Act Rule 13a-21                            burden increase
------------------------------------------------------------------------
 Require additional       An increase of 3    This increase is
 disclosure regarding the          burden hours for    the estimated
 structure of an issuer's          each of the         effect on the
 repurchase program and its        affected forms:     affected forms by
 share repurchases;.               Form 10-K, Form     the proposed
 Require new checkbox to   10-Q, Form 20-F     amendments to
 indicate if any of the issuer's   and Form N-CSR.     include
 officers or directors subject                         additional share
 to the reporting requirements                         repurchase
 under Section 16(a) of the                            disclosures,
 Exchange Act purchased or sold                        clarify the
 shares or other units of the                          rules, and
 class of the issuer's equity                          require the use
 securities that is the subject                        of structured
 of an issuer share repurchase                         data for this
 plan or program within 10                             information.
 business days before or after
 the announcement of an issuer
 purchase plan or program; and.
 Require information to
 be reported using a structured
 data language.
------------------------------------------------------------------------

    Considering the various revisions outlined in Sections II.B, II.C. 
and II.D. above, we estimate that proposed new Rule 13a-21, Item 703 of 
Regulation S-K, Item 16E of Form 20-F, Item 9 of Form N-CSR, and Rule 
405 of Regulation S-T (interactive data file submission requirements) 
would increase the paperwork burden for filings on the affected forms 
that include share repurchase disclosure. However, not all filings on 
the affected forms include these disclosures because they are provided 
only when an issuer conducts share repurchases that trigger the 
disclosure requirement. Therefore, to estimate the increase in overall 
paperwork burden from the proposed amendments, we first estimated the 
number of filings that include share repurchase information. As 
indicated in paragraph B.1 of this section, we estimate that 
approximately 3,300 operating companies (among them, approximately 250 
foreign private issuers filing on Form 20-F) and approximately 100 
registered closed-end funds during fiscal year 2020 would be affected 
by the amendments. Based on the staff's findings, the table below sets 
forth our estimates of the number of filings on these forms that 
included share repurchase disclosure. We used this data to extrapolate 
the effect of these changes on the paperwork burden for the listed 
periodic reports.\115\
---------------------------------------------------------------------------

    \115\ The OMB PRA filing inventories represent a three-year 
average. Averages may not align with the actual number of filings in 
any given year.

            PRA Table 3--Estimated Number of Affected Filings
------------------------------------------------------------------------
                                                            Number of
                                         Current annual    filings that
                 Form                     responses in    include share
                                         PRA inventory      repurchase
                                                            disclosure
------------------------------------------------------------------------
10-K..................................            8,292            3,050
10-Q..................................           22,925            9,150
20-F..................................              729              250
N-CSR.................................            6,898              200
------------------------------------------------------------------------

C. Incremental and Aggregate Burden and Cost Estimates

    Below we estimate the incremental and aggregate changes in 
paperwork burden as a result of the proposed amendments. These 
estimates represent the average burden for all issuers, both large and 
small. In deriving our estimates, we recognize that the burdens will 
likely vary among individual issuers. The proposed amendments would 
create a new required collection of information and change the burden 
per response of existing collections of information, if adopted.
    We calculated the burden estimates by adding the estimated 
additional burden to the existing estimated responses and multiplying 
the estimated number of responses by the estimated average amount of 
time it would take an issuer to prepare and review disclosure required 
under the proposed amendments. For purposes of the PRA, the burden is 
to be allocated between internal burden hours and outside professional 
costs. PRA Table 4 below sets forth the percentage estimates we 
typically use for the burden allocation for each collection of 
information and the estimated burden allocation for the proposed new 
collection of information. We also estimate that the average cost of 
retaining outside professionals is $400 per hour.\116\
---------------------------------------------------------------------------

    \116\ We recognize that the costs of retaining outside 
professionals may vary depending on the nature of the professional 
services, but for purposes of this PRA analysis, we estimate that 
such costs would be an average of $400 per hour. This estimate is 
based on consultations with several issuers, law firms, and other 
persons who regularly assist issuers in preparing and filing reports 
with the Commission.

PRA Table 4--Estimated Burden Allocation for the Affected Collections of
                               Information
------------------------------------------------------------------------
                                                              Outside
          Collection of information             Internal   professionals
                                                  (%)           (%)
------------------------------------------------------------------------
Forms 10-K, 10-Q, N-CSR, SR..................         75              25
Form 20-F....................................         25              75
------------------------------------------------------------------------

    PRA Table 5 below illustrates the incremental change to the total 
annual compliance burden of affected forms, in hours and in costs, as a 
result of the proposed amendments' estimated effect on the paperwork 
burden per response.

[[Page 8464]]



           PRA Table 5--Calculation of the Incremental Change in Burden Estimates of Current Responses Resulting From the Proposed Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Number of
                                          estimated      Burden hour      Change in                              Change in professional     Change in
      Collection of Information           affected      increase per    burden hours   Change in company hours           hours             professional
                                          responses       response                                                                            costs
                                              (A) \a\             (B)     (C) = (A) x      (D) = (C) x 0.75 or      (E) = (C) x 0.25 or      (F) = (E) x
                                                                                  (B)                     0.25                     0.75             $400
--------------------------------------------------------------------------------------------------------------------------------------------------------
10-K.................................           3,050               3           9,150                   6862.5                  2,287.5         $915,000
10-Q.................................           9,150               3          27,450                 20,587.5                  6,862.5        2,745,000
20-F.................................             250               3             750                    187.5                    562.5          225,000
N-CSR................................             200               3             600                      450                      150           60,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The following tables summarize the requested paperwork burden, 
including the estimated total reporting burdens and costs, under the 
proposed amendments.
---------------------------------------------------------------------------

    \117\ For purposes of the PRA, the requested change in burden 
hours (column H) is rounded to the nearest whole number.

                                                           PRA Table 6--Requested Paperwork Burden Under the Proposed Amendments \117\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Current  burden                           Program change                        Requested change in burden
                                                               ---------------------------------------------------------------------------------------------------------------------------------
                             Form                                 Current      Current                      Number of    Change in     Change in
                                                                   annual       burden      Current cost     affected     company    professional     Annual      Burden hours     Cost burden
                                                                 responses      hours          burden       responses      hours         costs      responses
                                                                        (A)          (B)              (C)          (D)          (E)           (F)          (G)  (H) = (B) + (E)  (I) = (C) + (F)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Form 10-K.....................................................        8,292   14,188,040   $1,893,793,119        3,050      6,862.5      $915,000        8,292       14,194,903   $1,894,708,119
Form 10-Q.....................................................       22,925    3,182,333      421,490,754        9,150     29,587.5     2,745,000       22,925        3,211,921      424,235,754
Form 20-F.....................................................          729      479,261      576,824,025          250        187.5       225,000          729          479,449      577,049,025
Form N-CSR....................................................        6,898      181,167        5,199,584          200          450        60,000        6,898          181,617        5,259,584
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    PRA Table 7 summarizes the requested paperwork burden for the new 
Form SR collection of information, including the estimated total 
reporting burdens and costs, under the proposed amendments as described 
in Section II.A. For purposes of the PRA, we estimate that new Form SR 
will entail a 1.5 hour compliance burden per response with 176,800 
annual responses.

                  PRA Table 7--Requested Paperwork Burden for the New Collection of Information
----------------------------------------------------------------------------------------------------------------
                                                                  Requested paperwork burden
                                            --------------------------------------------------------------------
         Collection of information                Annual
                                                responses         Burden hours               Cost burden
                                                        (A)    (A) x 1.5 x (0.75)     (A) x 1.5 x (0.25) x $400
----------------------------------------------------------------------------------------------------------------
Form SR....................................         176,800               189,900                   $26,520,000
----------------------------------------------------------------------------------------------------------------

Request for Comment
    Pursuant to 44 U.S.C. 3506(c)(2)(B), we request comment in order 
to:
     Evaluate whether the proposed collections of information 
are necessary for the proper performance of the functions of the 
Commission, including whether the information will have practical 
utility;
     Evaluate the accuracy of our assumptions and estimates of 
the frequency with which issuers conduct issuer share repurchases and 
of the initial and ongoing burden of the proposed collection of 
information;
     Determine whether there are ways to enhance the quality, 
utility, and clarity of the information to be collected;
     Evaluate whether there are ways to minimize the burden of 
the collection of information on those who respond, including through 
the use of automated collection techniques or other forms of 
information technology; and
     Evaluate whether the proposed amendments would have any 
effects on any other collection of information not previously 
identified in this section.
    Any member of the public may direct to us any comments concerning 
the accuracy of these burden estimates and any suggestions for reducing 
these burdens. Persons submitting comments on the collection of 
information requirements should direct their comments to the Office of 
Management and Budget, Attention: Desk Officer for the U.S. Securities 
and Exchange Commission, Office of Information and Regulatory Affairs, 
Washington, DC 20503, and send a copy to Vanessa A. Countryman, 
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549, with reference to File No. S7-21-21. Requests for 
materials submitted to OMB by the Commission with regard to the 
collection of information requirements should be in writing, refer to 
File No. S7-21-21 and be submitted to the U.S. Securities and Exchange 
Commission, Office of FOIA Services,

[[Page 8465]]

100 F Street NE, Washington, DC 20549. OMB is required to make a 
decision concerning the collection of information requirements between 
30 and 60 days after publication of the proposed amendments. 
Consequently, a comment to OMB is best assured of having its full 
effect if the OMB receives it within 30 days of publication.

VI. Small Business Regulatory Enforcement Fairness Act

    For purposes of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (``SBREFA''),\118\ the Commission must advise OMB as to 
whether the proposed amendments constitute a ``major'' rule. Under 
SBREFA, a rule is considered ``major'' where, if adopted, it results, 
or is likely to result, in:
---------------------------------------------------------------------------

    \118\ 138 Public Law 104-121, Title II, 110 Stat. 857 (1996).
---------------------------------------------------------------------------

     An annual effect on the economy of $100 million or more 
(either in the form of an increase or a decrease);
     A major increase in costs or prices for consumers or 
individual industries; or
     Significant adverse effects on competition, investment or 
innovation.
    We request comment on whether the proposed amendments would be a 
``major rule'' for purposes of SBREFA. We solicit comment and empirical 
data on: (a) The potential effect on the U.S. economy on an annual 
basis; (b) any potential increase in costs or prices for consumers or 
individual industries; and (c) any potential effect on competition, 
investment or innovation. Commenters are requested to provide empirical 
data and other factual support for their views to the extent possible.

VII. Initial Regulatory Flexibility Analysis

    When an agency issues a rulemaking proposal, the Regulatory 
Flexibility Act (``RFA'') \119\ requires the agency to prepare and make 
available for public comment an Initial Regulatory Flexibility Analysis 
(``IRFA'') that will describe the impact of the proposed rule on small 
entities.\120\ This IRFA has been prepared in accordance with the 
Regulatory Flexibility Act. It relates to proposed amendments or 
additions to the rules and forms described in Section II above.
---------------------------------------------------------------------------

    \119\ 5 U.S.C. 601 et seq.
    \120\ 5 U.S.C. 603(a).
---------------------------------------------------------------------------

A. Reasons for, and Objectives of, the Proposed Action

    The proposed amendments are intended to modernize and improve 
disclosure about repurchases of an issuer's equity securities that are 
registered under Section 12 of the Exchange Act. Specifically, the 
proposed amendments would require an issuer to (i) provide more timely 
disclosure on a new Form SR regarding purchases of its Section 12 
registered equity securities for each day that it, or an affiliated 
purchaser, makes a share repurchase; (ii) provide additional periodic 
disclosures about these purchases; and (iii) tag the required 
information using Inline XBRL. The reasons for, and objectives of, the 
proposed amendments are discussed in more detail in Section II above.

B. Legal Basis

    The amendments contained in this release are being proposed under 
the authority set forth in the Exchange Act, particularly, Sections 12, 
13, 15, and 23(a) thereof; and the Investment Company Act, particularly 
Sections 8, 23, 24(a), 30, 31, and 38.

C. Small Entities Subject to the Proposed Rules

    The proposed amendments would affect some issuers that are small 
entities. The RFA defines ``small entity'' to mean ``small business,'' 
``small organization,'' or ``small governmental jurisdiction.'' \121\ 
For purposes of the RFA, under 17 CFR 230.157 and 17 CFR 240.0-10(a), 
an issuer, other than an investment company, is a ``small business'' or 
``small organization'' if it had total assets of $5 million or less on 
the last day of its most recent fiscal year and is engaged or proposing 
to engage in an offering of securities not exceeding $5 million. We 
estimate that there are approximately 717 issuers with a class of 
securities registered under Section 12 of the Exchange Act that file 
with the Commission, other than investment companies, that may be 
considered small entities and are potentially subject to the proposed 
amendments.\122\ For purposes of Commission rulemaking in connection 
with the RFA, an investment company (including a BDC) is a small entity 
if, together with other investment companies in the same group of 
related investment companies, it has net assets of $50 million or less 
as of the end of its most recent fiscal year.\123\ Commission staff 
estimates that approximately 23 registered closed-end funds and 9 BDCs 
are small entities.\124\
---------------------------------------------------------------------------

    \121\ 5 U.S.C. 601(6).
    \122\ This estimate is based on staff analysis of issuers, 
excluding co-registrants, subsidiaries, or asset-backed securities, 
with EDGAR filings of Form 10-K and 20-F, or amendments thereto, 
filed during the calendar year of January 1, 2020, to December 31, 
2020 or filed by September 1, 2021 that, if timely filed by the 
applicable deadline, would have been filed between January 1 and 
December 31, 2020. Analysis is based on data from XBRL filings, 
Compustat, Ives Group Audit Analytics, and manual review of filings 
submitted to the Commission.
    \123\ See 17 CFR 270.0-10(a).
    \124\ This estimate is derived from an analysis of data obtained 
from Morningstar Direct as well as data reported to the Commission 
for the period ending June 2021.
---------------------------------------------------------------------------

D. Projected Reporting, Recordkeeping and Other Compliance Requirements

    If adopted, the proposed amendments would require the filing of a 
new form along with enhanced disclosures and the use of Inline XBRL, 
which would increase the compliance costs for issuers conducting share 
repurchases. Further, the proposed amendments would expand the 
information provided on existing forms regarding an issuer's share 
repurchases. In addition, compliance with the proposed amendments may 
require the use of professional skills.
    The proposed amendments would apply to small entities to the same 
extent as other entities, irrespective of size. As noted in Section 
IV.D. above, while we acknowledge that smaller issuers are more likely 
to be affected by the costs of additional disclosure, smaller issuers 
are also less likely to have share repurchases, which would limit the 
incremental burden of additional reporting under the proposed 
amendments.\125\ In addition, while we would expect larger registered 
closed-end funds and BDCs (``funds''), or funds that are part of a 
large fund complex, to incur higher costs related to this requirement 
in absolute terms relative to a smaller fund or a fund that is part of 
a smaller fund complex, we would expect a smaller fund to find it more 
costly, per dollar managed, to comply with the proposed requirement 
because it would not be able to benefit from a larger fund complex's 
economies of scale. Nonetheless, we expect that the nature of any 
benefits and costs associated with the proposed amendments to be 
generally similar for large and small entities. Accordingly, we refer 
to the discussion of the proposed amendments' economic effects on all 
affected parties, including small entities, in Section IV above.\126\ 
Consistent with that discussion, we anticipate that the economic 
benefits and costs likely could vary widely among small entities, 
primarily based

[[Page 8466]]

on whether those small entities conduct share repurchases and how 
frequently they do so.
---------------------------------------------------------------------------

    \125\ See supra Section IV.D. In addition, in Section IV.C. 
above we further note that to the extent that the proposed 
requirements affect small filers to a greater extent than large 
filers, they could result in adverse effects on competition.
    \126\ We also discuss the estimated compliance burden associated 
with the proposed amendments for purposes of the PRA in Section V 
above.
---------------------------------------------------------------------------

E. Duplicative, Overlapping, or Conflicting Federal Rules

    We do not believe the proposed amendments would duplicate, 
overlap,\127\ or conflict with other existing federal rules. As 
proposed, Form SR would require daily disclosure of issuer share 
repurchases. Issuer periodic reports would also continue to provide 
monthly breakdowns of such repurchase activity. We additionally note 
that in the Rule 10b5-1 Proposing Release, we are separately proposing 
certain disclosure requirements for issuers regarding trading plans. In 
connection with the potential adoption of these rules, we would plan to 
coordinate the two releases to avoid any duplication, overlap or 
conflict between the rules.
---------------------------------------------------------------------------

    \127\ The proposed checkbox to indicate if any officer or 
director reporting pursuant to 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 10 business days before or after the issuer's 
announcement of such repurchase plan or program would require 
issuers to make this information more easily available to investors 
by working in conjunction with existing Section 16(a) disclosure to 
inform investors in periodic reports about an officer or directors 
trading activity.
---------------------------------------------------------------------------

F. Significant Alternatives

    The RFA directs us to consider alternatives that would accomplish 
our stated objectives, while minimizing any significant adverse impact 
on small entities. In connection with the proposed amendments, we 
considered the following alternatives:
     Establishing different compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities;
     Clarifying, consolidating, or simplifying compliance and 
reporting requirements under the rules for small entities;
     Using performance rather than design standards; and
     Exempting small entities from all or part of the 
requirements.\128\
---------------------------------------------------------------------------

    \128\ See supra Section IV.D.
---------------------------------------------------------------------------

    The proposed amendments are intended to improve disclosure about 
repurchases of an issuer's equity securities for investors to evaluate 
those activities and decrease any information asymmetry between issuers 
and investors. The additional disclosure, which would be provided in a 
machine-readable format, should permit investors to more quickly and 
efficiently evaluate information relating to issuer share repurchases, 
on a more timely basis. While we acknowledge that small entities are 
more likely to be affected by the costs of additional disclosure, all 
else equal (holding constant the disclosure burden), small entities are 
less likely to have share repurchases,\129\ which would limit the 
incremental burden of additional reporting under the proposed 
amendments for each small entity. Also, to the extent that small filers 
have relatively high information asymmetries because of lower analyst 
and institutional coverage, the proposed additional disclosure about 
their repurchases may be relatively more informative to investors. 
Because small entities are less likely to conduct share repurchases and 
in the event that they do, are more likely to have relatively high 
information asymmetries, we do not believe it would be appropriate to 
provide simplified or consolidated reporting requirements, a delayed 
compliance timetable, or an exemption for small entities from all or 
part of these requirements.
---------------------------------------------------------------------------

    \129\ See supra note 107 and accompanying text.
---------------------------------------------------------------------------

    We have used design rather than performance standards in connection 
with the proposed rules because we are seeking specific information 
relating to an issuer's repurchase activity with the goal of enabling 
investors to better analyze share repurchase activity. Thus, the 
objectives of the proposed rules are unlikely to be met using a 
performance standard.

G. Request for Comment

    We encourage the submission of comments with respect to any aspect 
of this IRFA. In particular, we request comments regarding:
     The number of small entities that may be affected by the 
proposed amendments;
     The existence or nature of the potential impact of the 
proposed amendments on small entities discussed in the analysis;
     How the proposed amendments could further lower the burden 
on small entities; and
     How to quantify the impact of the proposed amendments.
    Commenters are asked to describe the nature of any impact and 
provide empirical data supporting the extent of the impact. Comments 
will be considered in the preparation of the Final Regulatory 
Flexibility Analysis, if the proposed amendments are adopted, and will 
be placed in the same public file as comments on the proposed 
amendments themselves.

Statutory Authority

    The amendments contained in this release are being proposed under 
the authority set forth in Sections 12, 13, 15, and 23(a) of the 
Exchange Act, and Sections 8, 23, 24(a), 30, 31, and 38 of the 
Investment Company Act.

List of Subjects in 17 CFR Parts 229, 232, 240, 249, and 274

    Reporting and record keeping requirements, Securities.

    For the reasons set forth in the preamble, the Commission is 
proposing to amend title 17, chapter II of the Code of Federal 
Regulations as follows:

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES 
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND 
CONSERVATION ACT OF 1975--REGULATION S-K

0
1. The authority citation for part 229 continues to read as follows:

    Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 
77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1, 78o, 78u-
5, 78w, 78ll, 78 mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-
31(c), 80a-37, 80a-38(a), 80a-39, 80b-11 and 7201 et seq.; 18 U.S.C. 
1350; sec. 953(b), Pub. L. 111-203, 124 Stat. 1904 (2010); and sec. 
102(c), Pub. L. 112-106, 126 Stat. 310 (2012).

0
2. Revise Sec.  229.703 to read as follows:


Sec.  229.703   (Item 703) Purchases of equity securities by the issuer 
and affiliated purchasers.

    (a) Provide the specified information in the following tabular 
format, and narratively with respect to any purchase made by or on 
behalf of the issuer or any ``affiliated purchaser,'' as defined in 
Sec.  240.10b-18(a)(3) of this chapter, of shares or other units of any 
class of the issuer's equity securities that is registered by the 
issuer pursuant to section 12 of the Exchange Act (15 U.S.C. 78l).

[[Page 8467]]



                         Table 1 to Paragraph (a)--Issuer Purchases of Equity Securities
[Use the checkbox to indicate if any officer or director reporting pursuant to Section 16(a) of the Exchange Act
 (15 U.S.C. 78p(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 (10) business days before or after the
                       issuer's announcement of such repurchase plan or program. [square]]
----------------------------------------------------------------------------------------------------------------
                                          (a)             (b)                (c)                    (d)
Period                                Total number         Average  Total number of        Maximum number (or
                                         of shares      price paid   shares (or units)      approximate dollar
                                        (or units)       per share   purchased as part of   value) of shares (or
                                         purchased       (or unit)   publicly announced     units) that may yet
                                                                     plans or programs.     be purchased under
                                                                                            the plans or
                                                                                            programs
----------------------------------------------------------------------------------------------------------------
Month #1 (identify beginning and
 ending dates).
Month #2 (identify beginning and
 ending dates).
Month #3 (identify beginning and
 ending dates).
    Total.........................
----------------------------------------------------------------------------------------------------------------

    (b) The table shall include the following information for each 
class or series of securities for each month included in the period 
covered by the report:
    (1) The total number of shares (or units) purchased (column (a)), 
including all issuer repurchases whether or not made pursuant to 
publicly announced plans or programs;
    (2) The average price paid per share (or unit) (column (b));
    (3) The aggregate total number of shares (or units) purchased as 
part of publicly announced repurchase plans or programs (column (c)); 
and
    (4) The aggregate maximum number (or approximate dollar value) of 
shares (or units) that may yet be purchased under the plans or programs 
(column (d)).
    (c) Disclose, by footnote to the table or narrative accompanying 
the table:
    (1) The objective or rationale for each repurchase plan or program 
and the process or criteria used to determine the amount of 
repurchases;
    (2) The number of shares purchased:
    (i) Other than through a publicly announced plan or program, and if 
so, 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);
    (ii) In reliance on the safe harbor in Sec.  240.10b-18 of this 
chapter; and
    (iii) Pursuant to a plan that is intended to satisfy the 
affirmative defense conditions of Sec.  240.10b5-1(c) of this chapter, 
and if so, the date(s) the plan was adopted or terminated.
    (3) For publicly announced repurchase plans or programs:
    (i) The date each plan or program was announced;
    (ii) The dollar amount (or share or unit amount) approved;
    (iii) The expiration date (if any) of each plan or program;
    (iv) Each plan or program that has expired during the period 
covered by the table; and
    (v) 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.
    (4) 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.
    (d) Provide the disclosure required by this section in an 
Interactive Data File as required by Sec.  232.405 of this chapter 
(Rule 405 of Regulation S-T) in accordance with the EDGAR Filer Manual.

PART 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR 
ELECTRONIC FILINGS

0
3. The general authority citation for part 232 continues to read as 
follows:

    Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 
77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 80a-6(c), 
80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; and 18 U.S.C. 1350, 
unless otherwise noted.
* * * * *
0
4. Amend Sec.  232.405 by:
0
a. Revising the introductory text and paragraphs (a)(2) and (4);
0
b. Removing the word ``and'' at the end of paragraph (b)(1)(i);
0
c. Removing the period at the end of paragraph (b)(1)(ii) and adding 
``; and'' in its place.
0
d. Adding paragraph (b)(1)(iii);
0
e. Removing the word ``and'' at the end of paragraph (b)(3)(ii);
0
f. Removing the period at the end of paragraph (b)(3)(iii) and adding 
``; and'' in its place.
0
g. Adding paragraphs (b)(3)(iv) and (b)(4); and
0
h. Revising Note 1 to Sec.  232.405.
    The revisions and additions read as follows:


Sec.  232.405  Interactive Data File submissions.

    This section applies to electronic filers that submit Interactive 
Data Files. Section 229.601(b)(101) of this chapter (Item 601(b)(101) 
of Regulation S-K), paragraph (101) of Part II--Information Not 
Required to be Delivered to Offerees or Purchasers of Form F-10 (Sec.  
239.40 of this chapter), Sec.  240.13a-21 of this chapter (Rule 13a-21 
of the Exchange Act Rules), paragraph 101 of the Instructions as to 
Exhibits of Form 20-F (Sec.  249.220f of this chapter), paragraph 
B.(15) of the General Instructions to Form 40-F (Sec.  249.240f of this 
chapter), paragraph C.(6) of the General Instructions to Form 6-K 
(Sec.  249.306 of this chapter), General Instruction I of Form SR 
(Sec.  249.333 of this chapter), General Instruction C.3.(g) of Form N-
1A (Sec. Sec.  239.15A and 274.11A of this chapter), General 
Instruction I of Form N-2 (Sec. Sec.  239.14 and 274.11a-1 of this 
chapter), General Instruction C.3.(h) of Form N-3 (Sec. Sec.  239.17a 
and 274.11b of this chapter), General Instruction C.3.(h) of Form N-4 
(Sec. Sec.  239.17b and 274.11c of this chapter), General Instruction 
C.3.(h) of Form N-6 (Sec. Sec.  239.17c and 274.11d of this chapter), 
and General Instruction C.4 of Form N-CSR (Sec. Sec.  249.331 and 
274.128 of this chapter) specify when electronic filers are required or 
permitted to submit an Interactive Data File (Sec.  232.11), as further 
described in note 1 to this section. This section imposes content, 
format, and submission requirements for an Interactive Data File, but 
does not change the substantive content requirements for the financial 
and other

[[Page 8468]]

disclosures in the Related Official Filing (Sec.  232.11).
    (a) * * *
    (2) Be submitted only by an electronic filer either required or 
permitted to submit an Interactive Data File as specified by Sec.  
229.601(b)(101) of this chapter (Item 601(b)(101) of Regulation S-K), 
paragraph (101) of Part II--Information Not Required to be Delivered to 
Offerees or Purchasers of Form F-10 (Sec.  239.40 of this chapter), 
Rule 13a-21 of the Exchange Act Rules (Sec.  240.13a-21 of this 
chapter), paragraph 101 of the Instructions as to Exhibits of Form 20-F 
(Sec.  249.220f of this chapter), paragraph B.(15) of the General 
Instructions to Form 40-F (Sec.  249.240f of this chapter), paragraph 
C.(6) of the General Instructions to Form 6-K (Sec.  249.306 of this 
chapter), General Instruction I to Form SR (Sec.  249.333 of this 
chapter), General Instruction C.3.(g) of Form N-1A (Sec. Sec.  239.15A 
and 274.11A of this chapter), General Instruction I of Form N-2 
(Sec. Sec.  239.14 and 274.11a-1 of this chapter), General Instruction 
C.3.(h) of Form N-3 (Sec. Sec.  239.17a and 274.11b of this chapter), 
General Instruction C.3.(h) of Form N-4 (Sec. Sec.  239.17b and 274.11c 
of this chapter), General Instruction C.3.(h) of Form N-6 (Sec. Sec.  
239.17c and 274.11d of this chapter), or General Instruction C.4 of 
Form N-CSR (Sec. Sec.  249.331 and 274.128 of this chapter), as 
applicable;
* * * * *
    (4) Be submitted in accordance with the EDGAR Filer Manual and, as 
applicable, Item 601(b)(101) of Regulation S-K (Sec.  229.601(b)(101) 
of this chapter), paragraph (101) of Part II--Information Not Required 
to be Delivered to Offerees or Purchasers of Form F-10 (Sec.  239.40 of 
this chapter), Rule 13a-21 of the Exchange Act Rules (Sec.  240.13a-21 
of this chapter), paragraph 101 of the Instructions as to Exhibits of 
Form 20-F (Sec.  249.220f of this chapter), paragraph B.(15) of the 
General Instructions to Form 40-F (Sec.  249.240f of this chapter), 
paragraph C.(6) of the General Instructions to Form 6-K (Sec.  249.306 
of this chapter), General Instruction I to Form SR (Sec.  249.333 of 
this chapter), General Instruction C.3.(g) of Form N-1A (Sec. Sec.  
239.15A and 274.11A of this chapter), General Instruction I of Form N-2 
(Sec. Sec.  239.14 and 274.11a-1 of this chapter), General Instruction 
C.3.(h) of Form N-3 (Sec. Sec.  239.17a and 274.11b of this chapter), 
General Instruction C.3.(h) of Form N-4 (Sec. Sec.  239.17b and 274.11c 
of this chapter), General Instruction C.3.(h) of Form N-6 (Sec. Sec.  
239.17c and 274.11d of this chapter); or General Instruction C.4 of 
Form N-CSR (Sec. Sec.  249.331 and 274.128 of this chapter).
    (b) * * *
    (1) * * *
    (iii) As applicable, the disclosure set forth in paragraph (b)(4) 
of this section.
* * * * *
    (3) * * *
    (iv) As applicable, the disclosure set forth in paragraph (b)(4) of 
this section.
    (4) An Interactive Data File must consist of the disclosure 
provided under 17 CFR part 229 (Regulation S-K) and related provisions 
that is required to be tagged, including, as applicable, the repurchase 
information required by:
    (i) Section 229.703 of this chapter (Item 703 of Regulation S-K);
    (ii) Item 16E of Form 20-F (Sec.  249.220f of this chapter);
    (iii) Item 9 of Form N-CSR (Sec. Sec.  249.331 and 274.128 of this 
chapter); and
    (iv) General Instruction I to Form SR (Sec.  249.333 of this 
chapter).
* * * * *

    Note 1 to Sec.  232.405: Section 229.601(b)(101) of this chapter 
(Item 601(b)(101) of Regulation S-K) specifies the circumstances 
under which an Interactive Data File must be submitted and the 
circumstances under which it is permitted to be submitted, with 
respect to Sec.  239.11 of this chapter (Form S-1), Sec.  239.13 of 
this chapter (Form S-3), Sec.  239.25 of this chapter (Form S-4), 
Sec.  239.18 of this chapter (Form S-11), Sec.  239.31 of this 
chapter (Form F-1), Sec.  239.33 of this chapter (Form F-3), Sec.  
239.34 of this chapter (Form F-4), Sec.  249.310 of this chapter 
(Form 10-K), Sec.  249.308a of this chapter (Form 10-Q), and Sec.  
249.308 of this chapter (Form 8-K). Paragraph (101) of Part II--
Information not Required to be Delivered to Offerees or Purchasers 
of Sec.  239.40 of this chapter (Form F-10) specifies the 
circumstances under which an Interactive Data File must be submitted 
and the circumstances under which it is permitted to be submitted, 
with respect to Form F-10. Paragraph 101 of the Instructions as to 
Exhibits of Sec.  249.220f of this chapter (Form 20-F) specifies the 
circumstances under which an Interactive Data File must be submitted 
and the circumstances under which it is permitted to be submitted, 
with respect to Form 20-F. Paragraph B.(15) of the General 
Instructions to Sec.  249.240f of this chapter (Form 40-F) and 
Paragraph C.(6) of the General Instructions to Sec.  249.306 of this 
chapter (Form 6-K) specify the circumstances under which an 
Interactive Data File must be submitted and the circumstances under 
which it is permitted to be submitted, with respect to Sec.  
249.240f of this chapter (Form 40-F) and Sec.  249.306 of this 
chapter (Form 6-K). Section 240.13a-21 of this chapter (Rule 13a-21 
of the Exchange Act Rules) and General Instruction I to Sec.  
249.333 of this chapter (Form SR) specifies the circumstances under 
which an Interactive Data File must be submitted, with respect to 
Form SR. Section 229.601(b)(101) (Item 601(b)(101) of Regulation S-
K), paragraph (101) of Part II--Information not Required to be 
Delivered to Offerees or Purchasers of Form F-10, paragraph 101 of 
the Instructions as to Exhibits of Form 20-F, paragraph B.(15) of 
the General Instructions to Form 40-F, and paragraph C.(6) of the 
General Instructions to Form 6-K all prohibit submission of an 
Interactive Data File by an issuer that prepares its financial 
statements in accordance with 17 CFR 210.6-01 through 210.6-10 
(Article 6 of Regulation S-X). For an issuer that is a management 
investment company or separate account registered under the 
Investment Company Act of 1940 (15 U.S.C. 80a et seq.) or a business 
development company as defined in Section 2(a)(48) of the Investment 
Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), General Instruction 
C.3.(g) of Form N-1A (Sec. Sec.  239.15A and 274.11A of this 
chapter), General Instruction I of Form N-2 (Sec. Sec.  239.14 and 
274.11a-1 of this chapter), General Instruction C.3.(h) of Form N-3 
(Sec. Sec.  239.17a and 274.11b of this chapter), General 
Instruction C.3.(h) of Form N-4 (Sec. Sec.  239.17b and 274.11c of 
this chapter), General Instruction C.3.(h) of Form N-6 (Sec. Sec.  
239.17c and 274.11d of this chapter), and General Instruction C.4 of 
Form N-CSR (Sec. Sec.  249.331 and 274.128 of this chapter), as 
applicable, specifies the circumstances under which an Interactive 
Data File must be submitted.

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

0
5. The general authority citation for part 240 continues to read as 
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 
78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4, 
78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78dd, 78ll, 78mm, 
80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, and 7201 et 
seq., and 8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 
1350; Pub. L. 111-203, 939A, 124 Stat. 1376 (2010); and Pub. L. 112-
106, sec. 503 and 602, 126 Stat. 326 (2012), unless otherwise noted.
* * * * *
0
6. Add Sec.  240.13a-21 to read as follows:


Sec.  240.13a-21   Purchases of equity securities by the issuer and 
affiliated purchasers.

    (a) Every issuer that has a class of equity securities registered 
pursuant to section 12 of the Act (15 U.S.C. 78l) must furnish a Form 
SR (Sec.  249.333 of this chapter) to report, as specified by the form, 
any purchase made by or on behalf of the issuer or any ``affiliated 
purchaser,'' as defined in Sec.  240.10b-18(a)(3), of shares or other 
units of any class of the issuer's equity securities that is registered 
by the issuer pursuant to section 12 of the Act, within the time period 
specified in General Instruction I to Form SR. Provide the information 
required by the form in an Interactive Data File as required by Sec.  
232.405 of this chapter (Rule 405 of Regulation S-T) in

[[Page 8469]]

accordance with the EDGAR Filer Manual.
    (b) This section shall not apply to an investment company 
registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 
et. seq.), other than a registered closed-end investment company.

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
7. The general authority citation for part 249 continues to read as 
follows:

    Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C. 
5461 et seq.; 18 U.S.C. 1350; Sec. 953(b) Pub. L. 111-203, 124 Stat. 
1904; Sec. 102(a)(3) Pub. L. 112-106, 126 Stat. 309 (2012), Sec. 107 
Pub. L. 112-106, 126 Stat. 313 (2012), Sec. 72001 Pub. L. 114-94, 
129 Stat. 1312 (2015), and secs. 2 and 3 Pub. L. 116-222, 134 Stat. 
1063 (2020), unless otherwise noted.
* * * * *
0
8. Amend Form 20-F, by revising Part II, Item 16E (referenced in Sec.  
249.220f) to read as follows:

    Note: The text of Form 20-F does not, and this amendment will 
not, appear in the Code of Federal Regulations.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Form 20-F

* * * * *
Part II
* * * * *

Item 16E Purchases of Equity Securities by the Issuer and Affiliated 
Purchasers.

    (a) Provide the specified information in the following tabular 
format, and narratively, with respect to any purchase made by or on 
behalf of the issuer or any ``affiliated purchaser,'' as defined in 
Sec.  240.10b-18(a)(3) of this chapter, of shares or other units of any 
class of the issuer's equity securities that is registered by the 
issuer pursuant to section 12 of the Exchange Act (15 U.S.C. 78l).

ISSUER PURCHASES OF EQUITY SECURITIES

    Use the checkbox to indicate if any officer or director reporting 
pursuant to Section 16(a) of the Exchange Act (15 U.S.C. 78p(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 (10) business days before or after the 
issuer's announcement of such repurchase plan or program. [square]

----------------------------------------------------------------------------------------------------------------
                                          (a)             (b                 (c)                    (d)
Period                                Total number         Average  Total number of        Maximum number (or
                                         of shares      price paid   shares (or units)      approximate dollar
                                        (or units)       per share   purchased as part of   value) of shares (or
                                         purchased       (or unit)   publicly announced     units) that may yet
                                                                     plans or programs.     be purchased under
                                                                                            the plans or
                                                                                            programs
----------------------------------------------------------------------------------------------------------------
Month #1 (identify beginning and
 ending dates).
Month #2 (identify beginning and
 ending dates).
Month #3 (identify beginning and
 ending dates).
Month #4 (identify beginning and
 ending dates).
Month #5 (identify beginning and
 ending dates).
Month #6 (identify beginning and
 ending dates).
Month #7 (identify beginning and
 ending dates).
Month #8 (identify beginning and
 ending dates).
Month #9 (identify beginning and
 ending dates).
Month #10 (identify beginning and
 ending dates).
Month #11 (identify beginning and
 ending dates).
Month #12 (identify beginning and
 ending dates).
    Total.........................
----------------------------------------------------------------------------------------------------------------

    (b) The table shall include the following information for each 
class or series of securities for each month included in the period 
covered by the report:
    (1) The total number of shares (or units) purchased (column (a)), 
including all issuer repurchases whether or not made pursuant to 
publicly announced plans or programs;
    (2) The average price paid per share (or unit) (column (b));
    (3) The aggregate total number of shares (or units) purchased as 
part of publicly announced repurchase plans or programs (column (c)); 
and
    (4) The aggregate maximum number (or approximate dollar value) of 
shares (or units) that may yet be purchased under the plans or programs 
(column (d)).
    (c) Disclose, by footnote to the table or narrative accompanying 
the table:
    (1) The objective or rationale for each repurchase plan or program 
and the process or criteria used to determine the amount of 
repurchases;
    (2) The number of shares purchased:
    (i) Other than through a publicly announced plan or program, and if 
so, the nature of the transaction (e.g., whether the purchases were 
made in open-market transactions, tender offers, in satisfaction of the 
company's obligations upon exercise of outstanding put options issued 
by the company, or other transactions);
    (ii) In reliance on the safe harbor in 17 CFR 240.10b-18; and
    (iii) Pursuant to a plan that is intended to satisfy the 
affirmative defense conditions of 17 CFR 240.10b5-

[[Page 8470]]

1(c), and if so, the date(s) the plan was adopted or terminated.
    (3) For publicly announced repurchase plans or programs:
    (i) The date each plan or program was announced;
    (ii) The dollar amount (or share or unit amount) approved;
    (iii) The expiration date (if any) of each plan or program;
    (iv) Each plan or program that has expired during the period 
covered by the table; and
    (v) 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.
    (4) 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.
    (d) Provide the disclosure required by this Item in an Interactive 
Data File as required by Rule 405 of Regulation S-T (17 CFR 232.405) in 
accordance with the EDGAR Filer Manual.
0
9. Add Sec.  249.333 to read as follows:


Sec.  249.333   Form SR.

    This form shall be used for reporting of purchases by or on behalf 
of the issuer or an affiliated purchaser of equity securities 
registered by the issuer pursuant to section 12 of the Act (15 U.S.C. 
781).

PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940

0
10. The general authority citation for part 274 continues to read as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m, 
78n, 78o(d), 80a-8, 80a-24, 80a-26, 80a-29, and 80a-37, unless 
otherwise noted.
* * * * *
0
11. Amend Form N-CSR (referenced in Sec. Sec.  249.331 and 274.128) by 
revising Item 9 to read as follows:

    Note: The text of Form N-CSR does not, and these amendments will 
not, appear in the Code of Federal Regulations.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form N-CSR

* * * * *



    Item 9. Purchases of Equity Securities by Closed-End Management 
Investment Company and Affiliated Purchasers.
    (a) If the registrant is a closed-end management investment 
company, provide the specified information in the following tabular 
format, and narratively with respect to any purchase made by or on 
behalf of the registrant or any ``affiliated purchaser,'' as defined in 
17 CFR 240.10b-18(a)(3), of shares or other units of any class of the 
registrant's equity securities that is registered by the registrant 
pursuant to section 12 of the Exchange Act (15 U.S.C. 781).

REGISTRANT PURCHASES OF EQUITY SECURITIES

    Use the checkbox to indicate if any officer or director reporting 
pursuant to Section 16(a) of the Exchange Act (15 U.S.C. 78p(a)) 
purchased or sold shares or other units of the class of the 
registrant's equity securities that is the subject of a registrant 
share repurchase plan or program within ten (10) business days before 
or after the registrant's announcement of such repurchase plan or 
program.

 
----------------------------------------------------------------------------------------------------------------
                                          (a)             (b)                (c)                    (d)
Period                              Total numberof         Average  Total number of        Maximum number (or
                                            shares      price paid   shares (or units)      approximate dollar
                                        (or units)       per share   purchased as part of   value) of shares (or
                                         purchased       (or unit)   publicly announced     units) that may yet
                                                                     plans or programs.     be purchased under
                                                                                            the plans or
                                                                                            programs
----------------------------------------------------------------------------------------------------------------
Month #1 (identify beginning and
 ending dates).
Month #2 (identify beginning and
 ending dates).
Month #3 (identify beginning and
 ending dates).
Month #4 (identify beginning and
 ending dates).
Month #5 (identify beginning and
 ending dates).
Month #6 (identify beginning and
 ending dates).
    Total.........................
----------------------------------------------------------------------------------------------------------------

    (b) The table shall include the following information for each 
class or series of securities for each month included in the period 
covered by the report:
    (1) The total number of shares (or units) purchased (column (a)), 
including all registrant repurchases whether or not made pursuant to 
publicly announced plans or programs;
    (2) The average price paid per share (or unit) (column (b));
    (3) The aggregate total number of shares (or units) purchased as 
part of publicly announced repurchase plans or programs (column (c)); 
and
    (4) The aggregate maximum number (or approximate dollar value) of 
shares (or units) that may yet be purchased under the plans or programs 
(column (d)).
    (c) Disclose, by footnote to the table or narrative accompanying 
the table:
    (1) The objective or rationale for each repurchase plan or program 
and the process or criteria used to determine the amount of 
repurchases;
    (2) The number of shares purchased:
    (i) Other than through a publicly announced plan or program, and if 
so, the nature of the transaction (e.g., whether the purchases were 
made in open-market transactions, tender offers, in satisfaction of the 
registrant's obligations upon exercise of outstanding put options 
issued by the registrant, or other transactions);

[[Page 8471]]

    (ii) In reliance on the safe harbor in 17 CFR 240.10b-18; and
    (iii) Pursuant to a plan that is intended to satisfy the 
affirmative defense conditions of 17 CFR 240.10b5-1(c), and if so, the 
date(s) the plan was adopted or terminated.
    (3) For publicly announced repurchase plans or programs:
    (i) The date each plan or program was announced;
    (ii) The dollar amount (or share or unit amount) approved;
    (iii) The expiration date (if any) of each plan or program;
    (iv) Each plan or program that has expired during the period 
covered by the table; and
    (v) Each plan or program the registrant has determined to terminate 
prior to expiration, or under which the registrant does not intend to 
make further purchases.
    (4) Any policies and procedures relating to purchases and sales of 
the registrant's securities by its officers and directors during a 
repurchase program, including any restrictions on such transactions.
    (d) Provide the disclosure required by this Item in an Interactive 
Data File as required by Rule 405 of Regulation S-T (17 CFR 232.405) in 
accordance with the EDGAR Filer Manual.

    By the Commission.

    Dated: December 15, 2021.
Vanessa A. Countryman,
Secretary.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549
FORM SR

ISSUER SHARE REPURCHASE REPORT

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

(Exact name of registrant as specified in its charter)

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

(CIK number of registrant)

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

(Address of Principal Executive Offices)

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

(IRS Employer Identification No.)

    Securities registered pursuant to Section 12(b) of the Act:

------------------------------------------------------------------------
                                     Trading      Name of each exchange
      Title of each class           symbol(s)      on which registered
------------------------------------------------------------------------
 
------------------------------------------------------------------------


    Securities registered pursuant to section 12(g) of the Act:
-----------------------------------------------------------------------

(Title of class)
-----------------------------------------------------------------------

(Title of class)

GENERAL INSTRUCTIONS

I. Repurchases to be Reported and Time for Filing of Report

    If purchases are made by or on behalf of the registrant or any 
``affiliated purchaser,'' as defined in Sec.  240.10b-18(a)(3) of this 
chapter, of shares or other units of any class of the issuer's equity 
securities that is registered pursuant to section 12 of the Securities 
Exchange Act of 1934 (15 U.S.C. 781), furnish to the Commission in 
accordance with the requirements of Sec.  240.13a-21 the information 
set forth below in an Interactive Data File as required by Rule 405 of 
Regulation S-T (17 CFR 232.405) in the manner provided by the EDGAR 
Filer Manual before the end of the first business day following the day 
on which the share repurchase order has been executed. If there are 
material errors in, or material changes to, the information, furnish an 
amended Form SR.

II. Requirements for Use of Form SR

    (a) The class of shares (column (a)) should clearly identify the 
class, even if the issuer has only one class of securities outstanding.
    (b) The total number of shares purchased (column (b)) includes all 
shares (or units) repurchased by the issuer, regardless of whether made 
pursuant to publicly announced plans or programs.
    (c) The average price paid per share (or unit) (column (c)) shall 
be reported in U.S. dollars and exclude brokerage commissions and other 
costs of execution.
    (d) Total Number of Shares Purchased on the Open Market (column 
(d)) includes all shares (or units) repurchased by the issuer in open-
market transactions, and does not include shares (or units) purchased 
in tender offers, in satisfaction of the issuer's obligations upon 
exercise of outstanding put options issued by the issuer, or other 
transactions.
    (e) Total Number of Shares Purchased in Reliance on the Safe Harbor 
in 17 CFR 240.10b-18 (column (e)) includes all shares (or units) 
repurchased in reliance on 17 CFR 240.10b-18.
    (f) Total Number of Shares Purchased Pursuant to a Plan that is 
Intended to Satisfy the Affirmative Defense Conditions of 17 CFR 
240.10b5-1(c) (column (f)) includes all shares (or units) repurchased 
where the issuer intended to satisfy the affirmative defense conditions 
of 17 CFR 240.10b5-1(c).

III. Preparation of Report

    This form is not to be used as a blank form to be filled in, but 
only as a guide in the preparation of the report meeting the 
requirements of 17 CFR 240.13a-21. The report shall contain all columns 
of the table, and any columns for which there is no relevant 
information may be appropriately marked or left blank. The table may 
contain additional columns as necessary to provide disclosure 
responsive to the requirements of 17 CFR 240.13a-21 provided the 
answers thereto are prepared in the manner specified in Rule 12b-13 (17 
CFR 240.12b-13). These General Instructions are not to be filed with 
the report.

IV. Submission of the Form

    This form must be submitted in electronic format via our Electronic 
Data Gathering Analysis and Retrieval System (EDGAR) in accordance with 
EDGAR rules set forth in Regulation S-T (17 CFR part 232). You must 
provide the signatures required for the Form in accordance with 17 CFR 
232.302.

[[Page 8472]]



                                      Issuer Purchases of Equity Securities
----------------------------------------------------------------------------------------------------------------
                  (a)             (b)             (c)             (d)              (e)                (f)
Date              Class of    Total number         Average    Total number  Total number of    Total number of
                    shares       of shares      price paid       of shares   shares purchased   shares purchased
                                 purchased       per share    purchased on   in reliance on     pursuant to a
                                                                  the open   the safe harbor    plan that is
                                                                    market   in 17 CFR          intended to
                                                                             240.10b-18.        satisfy the
                                                                                                affirmative
                                                                                                defense
                                                                                                conditions of 17
                                                                                                CFR 240.10b5-
                                                                                                1(c)
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SIGNATURES

    Pursuant to the requirements of the Act, the registrant has duly 
caused this report to be signed on its behalf by the undersigned 
hereunto duly authorized.

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(Registrant)

Date:------------------------------------------------------------------

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(Signature) *

    * Print name and title of the signing officer under their 
signature.

[FR Doc. 2022-01068 Filed 2-14-22; 8:45 am]
BILLING CODE 8011-01-P


