Biden

Wednesday

<div class="textg" style="text-align: justify; font-weight: lighter; line-height: 1.3em; font-size: 15px; border-radius: 3px; color: #80909a; padding: 10px; background-color: #F4F6F9; margin-bottom: 15px;">
 Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noreferrer noopener" class="deco-link">website policy</a>&nbsp;prior to making financial decisions.
</div> 
<p class="has-drop-cap">The Securities and Exchange Commission (SEC) proposed a rule that would force most public companies in the US to provide significantly more information about their <a href="https://tokenist.com/investing/what-is-a-stock-buyback/" rel="dofollow" class="deco-link">stock buyback</a> transactions, the <a aria-label="Wall Street Journal reported (opens in a new tab)" href="https://www.wsj.com/articles/sec-plans-to-demand-more-information-about-companies-stock-buybacks-42518aa1?mod=e2tw" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">Wall Street Journal reported</a> on Wednesday. Share repurchases hit a new record high of $923 billion in 2022.</p> 
<h3 id="current-stock-buyback-disclosure-requirements">Current Stock Buyback Disclosure Requirements</h3> 
<p>The SEC is set to host a vote on Wednesday to decide whether it should adopt a new rule asking publicly-listed companies for more disclosure when buying back their shares. The move comes after Congress implemented a <a href="https://tokenist.com/democrats-agree-on-1-excise-tax-for-stock-buybacks-tax-and-climate-bill/" rel="dofollow" class="deco-link">1% excise tax</a> on share repurchases in 2022, a toll that US President Joe Biden thinks should be four times higher.</p> 
<p>Alongside <a href="https://tokenist.com/investing/what-are-dividend-stocks/" rel="dofollow" class="deco-link">dividend payments</a>, stock buybacks are another method public companies use to return capital to their shareholders. But unlike the former, the buybacks were not taxable in the US until this year.</p> 
<p>Under current rules, public companies must calculate the number of shares they bought back, the amount of capital they spent on repurchases, and the average share price. The calculations are then reported in the companies’ quarterly financial results.</p> 
<p>The Democratic Parry has been a <a aria-label="longtime critic (opens in a new tab)" href="https://www.nytimes.com/2021/09/10/us/politics/stock-buybacks-partnerships-democrats-tax.html" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">longtime critic</a> of stock buybacks, alleging that such transactions distort the tax system and encourage companies to award shareholders and executives rather than re-investing their profits into technology, production, and employees. In 2022, share repurchases by S&amp;P 500 companies rose to a new <a aria-label="all-time high of $923 billion (opens in a new tab)" href="https://press.spglobal.com/2023-03-21-S-P-500-Q4-2022-Buybacks-Tick-up,-As-2022-Sets-A-Record-Proforma-Buyback-Tax-Would-Have-Reduced-Operating-Earnings-by-0-51-for-2022" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">all-time high of $923 billion</a>.</p> 
<div class="cta-referral"> 
 <img src="https://tokenist.com/wp-content/themes/thetokenist/assets/img/del/cta-referral-1.png" alt="" class="cta-referral__img" loading="lazy" decoding="async"> 
 <div class="cta-referral__text"> 
  <p>Join our&nbsp;<a href="https://t.me/thetokenist" target="_blank" rel="noreferrer noopener nofollow">Telegram group</a>&nbsp;and never miss a breaking digital asset story.</p> 
 </div> 
</div> 
<h3 id="what-does-the-sec-propose">What Does the SEC Propose?</h3> 
<p>According to the WSJ, the SEC takes a neutral stance on whether stock buybacks are good or bad. Instead, officials said the security regulator’s primary objective is to help companies’ investors better evaluate the purposes and effects of buybacks.</p> 
<p>Under the SEC’s proposal, the new rules would still require information about these transactions to be included in quarterly reports. However, instead of providing monthly totals, the companies would be asked to include daily tallies as more frequent disclosures would make it easier for analysts to compare the timing of these transactions and insider trades and identify purchases that were made to boost executive pay or corporate earnings.</p> 
<p>If the SEC’s commissioners vote in favor of the new rules, most US-listed companies would be required to include new stock buyback disclosures starting with their Q4 report this year.</p> 
<div class="cta-sub js__cta-sub"> 
 <div class="cta-sub__start" data-step="1"> 
  <div class="cta-sub__title">
   <strong>Finance is changing.</strong>
  </div> 
  <div class="cta-sub__subtitle">
   Learn how, with Five Minute Finance.
  </div> 
  <div class="cta-sub__excerpt">
   A weekly newsletter that covers the big trends in FinTech and Decentralized Finance.
  </div> <button type="button" class="btn">Try it out (for free)</button> 
 </div> 
 <div class="cta-sub__form" data-step="2" style="display: none;"> 
  <script type="text/javascript" src="https://app.getresponse.com/view_webform_v2.js?u=QcLhh&amp;webforms_id=zw3Wv"></script> 
 </div> 
 <div class="cta-sub__result" data-step="3" style="display: none;"> 
  <div class="cta-sub__title">
   Awesome
  </div> 
  <div class="cta-sub__caption">
   You’ve subscribed.
  </div> 
  <div class="cta-sub__greeting">
   You’re well on your way to being in the know.
  </div> 
 </div> 
</div> 
<p><em><strong>Do you agree that the US authorities should increase the disclosure requirements for share repurchases? Let us know in the comments below.</strong></em></p> 
<p>The post <a rel="nofollow" href="https://tokenist.com/the-sec-plans-to-make-it-harder-for-companies-to-buyback-stock/">The SEC Plans to Make it Harder for Companies to Buyback Stock</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

The SEC Plans to Make it Harder for Companies to Buyback Stock

Table of Contents

TokenInsight

Other articles published on May 3, 2023

WeFi Finance Launches Composable Leverage Vault Protocol for Trustless Onchain Investment

Bitcoin is the most trustworthy crypto, there’s no second best, says Michael Saylor

What Does It Take to Build in GameFi?

Cardano price analysis: ADA price correct down at $0.3835 as selling pressure

🗒 Daily Newsletter | Wednesday, May 03, 2023

Chainlink price analysis: LINK returns to $7.00, where is it headed next?

Join our free newsletter for daily crypto updates!