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Legal Alerts

New Regime for Share Buybacks

Legal Alerts
Capital Markets
Financial Institutions

New Development

On February 14, 2023, the Capital Markets Board (“CMB“) issued a resolution numbered 9/177 (“Resolution“) to facilitate share buybacks of public companies and their affiliates and to protect investors. You can access the Resolution here. The CMB’s prior announcements and resolutions regarding share buybacks (announcements dated July 21, 2016 and July 25, 2016 and resolutions dated June 23, 2022 and numbered 34/959, and dated August 21, 2015 and numbered 21/1023) were abolished.

What Will Change?

With the Resolution, until further notice, the CMB suspended certain obligations and limitations stipulated in the Communiqué on Share Buyback No. II-22.1 (“Communiqué“).

  • In this regard, the Resolution emphasizes that public companies and their subsidiaries may implement a buyback program relying on a board resolution without the need for shareholder approval. Such resolution must include the purpose of the buyback, the maximum estimated duration of the buyback program, the maximum number of shares to be acquired and the maximum amount of funds to be used. Shareholders will be notified accordingly in the first following general assembly meeting. In addition, the board resolution will be disclosed to the public within the framework of the CMB’s regulations on material event disclosures.
  • Pursuant to the CMB’s announcements dated July 21, 2016 and July 25, 2016, it was already possible for public companies to buy back shares without the need for shareholder approval. The Resolution maintained the implementation of this exemption.
  • Public companies may buy back shares without being subject to the limitations under the Communiqué.
  • Pursuant to the CMB’s announcements dated July 21, 2016 and July 25, 2016, the 10% limitation based on the nominal value of the bought shares and 25% limitation based on the average volume of the daily transaction amount were abolished. In addition to this the Resolution abolished the limitation that the total transaction amount may not exceed the distributable profit. Also, the limit that the bid offer for buybacks cannot be higher than the current highest bid offer pending in the order system will not be applied.
  • The shares bought back will not be sold for 30 days from the date of buyback and the “first-in, first-out” method will be applied in calculating the 30-day period. Public companies must dispose of their shares exceeding 10% of the total capital of the company as soon as possible, subject to the condition that it does not result in any losses and, in any case, within three years. If there are any unsold shares after three years, these shares will be redeemed.
  • The principles under the CMB’s announcements dated July 21, 2016 and July 25, 2016 applicable to the disposal of bought shares have also been adopted under the Resolution.
  • Public companies and their affiliates already managing a buyback program will be able to continue their programs under the conditions set out in the Resolution without a further board resolution.
  • The principles above will also apply to the bonus shares acquired as a result of share buybacks.


The CMB’s prior announcements and various resolutions had significantly facilitated share buybacks. The Resolution further relaxes the share buyback regime and consolidates the CMB acts modifying the Communiqué under one single roof.

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