Topic Information obligations for issuers Share buy-backs for other reasons, buy-backs of other instruments
Article from Issuer Guidelines published by the Federal Financial Supervisory Authority
A share buy-back programme must have one of the purposes referred to in Article 5(2) of the MAR in order to take advantage of the exemption provided for in Article 5(1) of the MAR. The list of permitted purposes under Article 5(2) of the MAR is exhaustive. In the case of share buy-backs for purposes not addressed by Article 5(2) of the MAR, the prohibitions of market manipulation and insider dealing therefore apply. For example, a case where a company decides to buy back shares so as to use them subsequently as an acquisition currency is not covered. For the substantive assessment of the buy-back programme according to the market manipulation rules, however, its concrete implementation is likely to matter more than the purpose being pursued. Additionally, the wording of Article 5(1) of the MAR states clearly that the exemption for buy-back programmes is limited to trading in own shares. In other words, Article 5(1) of the MAR does not apply, for example, to buy-backs of own bonds. However, transactions that do not fall within the scope of Article 5 of the MAR do not by themselves automatically constitute an infringement of Article 15 of the MAR. Rather, such transactions must be examined on a case-by-case basis to establish if they might infringe the prohibition of market manipulation.
