Debevoise Digest: Securities Law Synopsis – November 2023

November 2023

Fifth Circuit Gives SEC 30 Days to Fix Share Repurchase Rules

On October 31, 2023, the Fifth Circuit, in Chamber of Commerce of the USA vs. SEC, found that the U.S. Securities and Exchange Commission (the “SEC”) violated the Administrative Procedure Act and directed the SEC to “correct the defects” in its Share Repurchase Disclosure Modernization rules (the “Share Repurchase Rules”) within 30 days. The Fifth Circuit agreed with the U.S. Chamber of Commerce (the “Chamber”) that the SEC, in its rulemaking process, failed to adequately respond to the Chamber’s comments and failed to substantiate the Share Repurchase Rules’ benefits. However, the Fifth Circuit stopped short of vacating the Share Repurchase Rules, in recognition of “at least a serious possibility” that the SEC will remedy these deficiencies. The Fifth Circuit also agreed with the SEC that the Share Repurchase Rules do not violate the First Amendment by compelling speech.

While the SEC’s response remains to be seen, it is prudent for issuers to continue to prepare in the event the implementation of the Share Repurchase Rules is not delayed. Prior to the ruling, the Share Repurchase Rules were scheduled to begin to apply with the periodic report pertaining to the first fiscal quarter that begins on or after October 1, 2023 (i.e., for calendar year-end issuers, the Form 10-K to be filed in early 2024). For more information about the Share Repurchase Rules, see our Debevoise Update.

SEC Relieves Private Debt Issuers from New Disclosure Rules

On October 30, 2023, the SEC granted broker-dealers exemptive relief from the requirements of Rule 15c2-11 with respect to fixed-income securities to be sold in compliance with Rule 144A (i.e., to qualified institutional buyers). As we have previously reported, Rule 15c2-11 governs the publication of, and establishes current information and diligence requirements for a broker-dealer seeking to initiate (or resume), quotations for securities in over-the-counter markets.

The exemptive relief confirms that broker-dealers are not required to establish that Rule 15c2-11’s “specified information” about an issuer is current and publicly available, or that the information is accurate and from a reliable source, before publishing quotations for that issuer’s fixed-income securities to be sold in compliance with Rule 144A.

Supreme Court to Decide Whether a Private Right of Action Exists for Deficient MD&A

The Supreme Court has agreed to hear an appeal brought by Macquarie Infrastructure Corporation relating to whether there is a private right of action for omissions from the disclosures required by Item 303 of Regulation S-K (i.e., Management’s Discussion and Analysis of Financial Condition and Results of Operations, or “MD&A”). The Supreme Court was asked to address “[w]hether the Second Circuit erred in holding—in conflict with the Third, Ninth, and Eleventh Circuits—that a failure to make a disclosure required under Item 303 can support a private claim under [Exchange Act] Section 10(b), even in the absence of an otherwise misleading statement.” A decision to allow MD&A line-item omissions to serve as a basis for Section 10(b) liability could have a significant impact on private securities fraud litigation. For more information about the appeal, see our Insider Trading Disclosure Update.

2024 SEC Division of Examinations Priorities

On October 16, 2023, the SEC Division of Examinations (the “Division”) released its 2024 Examination Priorities (the “Priorities”). Because the Division changed the timing of its release to coincide with the beginning of the agency’s fiscal year, many of these Priorities are reiterations of those announced earlier this year. However, there are some notable additions and deletions from past Priorities. Key takeaways include the following:

  • The Division will continue to focus on assessing compliance with the Advisers Act Marketing Rule, including substantiation of marketing materials, performance advertising and compensated testimonials and endorsements.
  • The Division will continue to focus on registered investment advisers to private funds, including conflicts of interest, calculation and allocation of fees and expenses, and the impact of valuation practices.
  • The Priorities include venture capital fund advisers—for the first time in the more than 10 years since the Division began publishing its Priorities—with a focus on due diligence practices and assessments of prospective portfolio companies.
  • With respect to broker-dealers, the Division will continue to focus on compliance with Regulation Best Interest, including documentation of investment recommendations, consideration of reasonably available alternatives and conflicts disclosures and mitigation.
  • The Division did not identify ESG as a priority area in its adviser reviews for the first time in several years.

For more information, see Debevoise Insights.

SEC Rule-Making Agenda

The SEC’s Spring 2023 Regulatory Agenda was posted earlier this year. A summary of key rule changes is included below. For more information, see the full regulatory agenda here.


Stage of Rulemaking

Expected Release Date

Amendments to Requirements for Filer Validation and Access to the EDGAR Filing System

Proposed Rule Stage

October 2023

Amendments to Rule 15c3-3

Human Capital Disclosure

Registration for Index-Linked Annuities

Registration for Internet Advisers

Regulation D and Form D Improvements

Revisions to the Definition of Securities Held of Record

Amendments to Form PF to Require Current Reporting and Amend Reporting Requirements for Large Private Equity Advisers and Large Liquidity Fund Advisers

Final Rule Stage


October 2023


Clearing Agency Governance

Climate Change Disclosure

Cybersecurity Risk Management for Investment Advisers, Registered Investment Companies, and Business Development Companies

Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance Investment Practices

Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers

Further Definition of Dealers

Open-End Fund Liquidity Risk Management Programs and Swing Pricing; Form N–PORT Reporting

Removal of References to Credit Ratings from Regulation M

Special Purpose Acquisition Companies

Corporate Board Diversity Disclosure

Proposed Rule Stage


April 2024


Incentive-based Compensation Arrangements

Rule 144 Holding Period

Cybersecurity Risk Management Rules for Broker-Dealers, Clearing Agencies, MSBSPs, the MSRB, National Securities Associations, National Securities Exchanges, SBSDRs, SBS Dealers, and Transfer Agents

Final Rule Stage


April 2024


Electronic Submission of Certain Materials Under the Securities Exchange Act of 1934; Amendments Regarding FOCUS Report

Prohibition Against Conflicts of Interest in Certain Securitizations