SEC Issues Emergency Order, Relaxes Rules for Issuer Stock Repurchases

The order provides that the applicability of the safe harbor to opening transactions and trades during the last half hour of trading will apply upon the reopening of the markets, currently scheduled for Monday, September 17th, 2001. The release also provides additional flexibility with respect to the volume of repurchase transactions that can be executed by issuers under Rule 10b-18. Specifically, the volume condition will be satisfied if the issuer makes all Rule 10b-18 purchases, other than block purchases, in an amount through a broker or dealer on that day that does not exceed 100% of the average daily trading volume for the four calendar weeks preceding the week beginning on September 10, 2001. Additional guidance was also provided with respect to specialized accounting and timing provisions applicable to issuer market repurchases.

The Emergency Order is effective with respect to the five business days beginning on the date of the first reopening of trading on the US equities and options markets after September 11, 2001.