June Edition 2023

71 Location of Disclosure. While the SEC originally proposed that issuers would provide daily buyback disclosure on new Form SR, the Amendments require disclosure of daily buyback information on either a quarterly or semi-annual basis, depending on the type of issuer: • Issuers filing on domestic SEC forms must provide buyback disclosure quarterly on new Exhibit 26 to Forms 10-K and 10-Q. • FPIs reporting on FPI Forms must provide buyback disclosure quarterly on new Form F-SR. According to the adopting release, “if an FPI’s home country disclosures furnished on a Form 6-K satisfy the Form F-SR requirements, it can incorporate by reference its Form 6-K disclosures into its Form F-SR.” • Listed Closed-End Funds must provide buyback disclosure annually and semi-annually on Form N-SCR. Affirmative Defense to Insider Trading – Exchange Act Rule 10b5-1(c). Exchange Act Rule 10b5-1(c) provides an affirmative defense to insider trading claims relating to an issuer’s purchase of securities. An issuer’s buyback plan must conform to the requirements of Rule 10b5-1 in order for an issuer to assert this defense. Under the Existing Rules, there is no specific requirement for an issuer to disclose whether a particular repurchase was undertaken pursuant to a plan intended to benefit from Rule 10b5-1(c)’s affirmative defense. The Amendments introduce a new requirement that an issuer must now disclose in tabular form the aggregate total number of shares purchased in reliance on the plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). In addition, the Amendments require issuers to disclose, by footnote to the daily repurchase table, the date of adoption or termination of any plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) for the buybacks. The Amendments also adopt new Item 408(d) of Regulation S-K, creating new narrative disclosure requirements with respect to issuer Rule 10b5-1 trading arrangements. For example, Item 408(d) requires quarterly disclosure in periodic reports on Forms 10-Q and 10-K (for the fourth quarter) of the issuer’s adoption or termination of Rule 10b5-1 trading arrangement. In addition, Item 408(d) requires a description of the material terms of the Rule 10b5-1 trading arrangement, including the date on which the issuer adopted or terminated the Rule 10b5- 1 trading arrangement, the duration of the Rule 10b5-1 trading arrangement and the aggregate number of securities to be purchased or sold pursuant to the Rule 10b5-1 trading arrangement. However, this new item does not require disclosure with respect to the price at which the party executing the Rule 10b5-1 trading arrangement is authorized to trade.