Dear Ms. Countryman:

My name is Jennifer Schulp, and I am the director of financial regulation studies at the Cato Institute’s Center for Monetary and Financial Alternatives. I appreciate the opportunity to comment on the Securities and Exchange Commission’s proposed amendments intended to “modernize and improve disclosure about repurchases of an issuer’s equity securities that are registered under Section 12 of the Securities and Exchange Act of 1934.” The Cato Institute is a public policy research organization dedicated to the principles of individual liberty, limited government, free markets, and peace, and the Center for Monetary and Financial Alternatives focuses on identifying, studying, and promoting alternatives to centralized, bureaucratic, and discretionary financial regulatory systems. The opinions I express here are my own.

The amendments that the Commission proposes will impose heavy burdens on companies that seek to repurchase outstanding stock. Those burdens will have the effect—intended or not—of discouraging companies from engaging in repurchase activity that they may have otherwise judged to be in the best interest of the company’s shareholders. This impact alone raises the concern that what the Commission seeks to do with these proposed disclosure requirements is regulate corporate decision-making about share repurchases. When combined with the lack of evidence that share repurchases are systematically pursued to unlawfully manipulate share prices or related metrics—an issue over which the Commission has authority—and the fact that the disclosures proposed will have little impact on preventing such manipulation—other than through deterring repurchases generally—these proposed amendments are unjustified. The Commission should refrain from regulating corporate decision-making and focus its efforts on enforcing its antifraud and manipulation rules, with which share repurchases already must comply.