Rule 10b-18

Summary

Issuer safe harbor for common stock repurchases

SEC commentary

Rule 10b-18

Preliminary Notes

Rule 10b-18(b) Conditions to be met

Manner of purchase

Must use a single broker or dealer on any given day
Deters an issuer from creating the appearance of widespread broker-dealer interest and trading
Adopting release commentary 1982
SEC summary 2003
SEC commentary 2003
SEC FAQS

Timing

Issuers purchase can't be the opening transaction reported to the consolidated transaction reporting system
Issuer can't make purchases during the last half-hour before the scheduled close of trading
Because opening and late trades are looked to as significant indicators of the current market value of the security
Adopting release commentary 1982
SEC summary 2003
Changes made 2003
SEC FAQs

Price

Specifies the highest price an issuer may bid or pay
Generally limits the issuer to bidding for or buying its security at a price that is no higher than the current independent published bid or last independent transaction price
So that the issuer doesn't lead the market
Adopting release commentary 1982
SEC summary 2003
Changes made 2003
SEC FAQs

Volume of purchases

Rule 10b-18(c) Alternative conditions

Apply following a market-wide trading suspension

Rule 10b-18(d) Other purchases

No presumption of manipulation liability
if Rule 10b-18 conditions aren't satisfied

SEC Releases

Allows issuers of actively traded securities to stay in the market longer at the end of the trading day
Extends safe harbor to certain after-hours repurchases
Applies a uniform pricing condition for all issuers
Increases the volume limit following a market-wide trading suspension
Modifies the the block exception
Clarifies the scope of the safe harbor with regard to mergers, acquisitions, and similar transactions

SEC FAQs

FAQs