Regulation 2003/2273 - Implementation of Directive 2003/6/EC as regards exemptions for buy-back programmes and stabilisation of financial instruments - Main contents

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Important legal notice

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Commission Regulation (EC) No 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buy-back programmes and stabilisation of financial instruments (Text with EEA relevance)

Official Journal L 336 , 23/12/2003 P. 0033 - 0038

Commission Regulation (EC) No 2273/2003

of 22 December 2003

implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buy-back programmes and stabilisation of financial instruments

(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Directive 2003/6/EC of the European Parliament and the Council of 28 January 2003 on insider dealing and market manipulation (market abuse)(1), and in particular Article 8 thereof,

After consulting the Committee of European Securities Regulators (CESR)(2) for technical advice,

Whereas:

• (1) 

  Article 8 of Directive 2003/6/EC provides that the prohibitions provided therein shall not apply to trading in own shares in "buy back" programmes or to the stabilisation of a financial instrument, provided such trading is carried out in accordance with implementing measures adopted to that effect.

• (2) 

  Activities of trading in own shares in "buy-back" programmes and of stabilisation of a financial instrument which would not benefit from the exemption of the prohibitions of Directive 2003/6/EC as provided for by Article 8 thereof, should not in themselves be deemed to constitute market abuse.

• (3) 

  On the other hand, the exemptions created by this Regulation only cover behaviour directly related to the purpose of the buy-back and stabilisation activities. Behaviour which is not directly related to the purpose of the buy-back and stabilisation activities shall therefore be considered as any other action covered by Directive 2003/6/EC and may be the object of administrative measures or sanctions, if the competent authority establishes that the action in question constitutes market abuse.

• (4) 

  As regards trading in own shares in "buy-back" programmes, the rules provided for by this Regulation are without prejudice to the application of Council Directive 77/91/EEC on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent(3).

• (5) 

  Allowable "buy back" activities in order to benefit from the exemption of the prohibitions of Directive 2003/6/EC include issuers needing the possibility to reduce their capital, to meet obligations arising from debt financial instruments exchangeable into equity instruments, and to meet obligations arising from allocations of shares to employees.

• (6) 

  Transparency is a prerequisite for prevention of market abuse. To this end Member States may officially appoint mechanisms to be used for public disclosure of information required to be publicly disclosed under this Regulation.

• (7) 

  Issuers having adopted "buy-back" programmes shall inform their competent authority and, wherever required, the public.

• (8) 

  Trading in own shares in "buy-back" programmes may be carried out through derivative financial instruments.

• (9) 

  In order to prevent market abuse, the daily volume of trading in own shares in "buy-back" programmes shall be limited. However, some flexibility is necessary in order to respond to given market conditions such as a low level of transactions.

• (10) 

  Particular attention has to be paid to the selling of own shares during the...

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