The SEC announced late last week that it has abandoned its rulemaking efforts begun last May to compel disclosure of share buyback rationales and data. The turnabout follows an October court ruling that the SEC failed to follow required procedures in adopting the rule and the SEC’s indication in December that it could not cure the defects in the time the court allotted. The SEC therefore announced that applicable requirements revert to those in effect before its rulemaking effort.

The episode not only ends the SEC’s efforts on the share buyback front but bodes ill for the SEC’s other recent rulemaking efforts, including its climate disclosure rule proposal. On the buyback front, state law lets corporations repurchase their shares and leading investors say buybacks can be a rational shareholder-friendly decision. But proponents of the stakeholder model of corporate governance criticize buybacks as harmful to workers or social equality. 

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