SEC Amends Share Repurchase Safe Harbor and Adopts New Share Repurchase Disclosure Requirement
By Michael L. Zuppone
One October 22, 2003, the Securities and Exchange Commission approved amendments to Rule 10b-18 under the Securities Exchange Act of 1934, a safe harbor regulation under which issuers can conduct open market share repurchases without the risk of liability for unlawful manipulation under Sections 9(a)(2) and 10(b) of the Exchange Act. Given the potential for such liability, virtually all share repurchase programs are undertaken in a manner that satisfies the manner, time, price, and volume conditions of the Rule 10b-18 safe harbor. The amendments to Rule 10b-18 are intended to simplify and update the safe harbor provisions in light of developments since the adoption of the original rule. The SEC also adopted new rules requiring issuers to disclose information concerning share repurchases in their periodic reports.