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ARTICLE · 28 JUNE 2022

MFSA Circular On The Execution Of Buy-Back Programmes In Accordance With MAR

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The Malta Financial Services Authority ("MFSA") has issued a circular on the 23 June 2022 focusing on share buy-back programmes under the Market Abuse Regulation ("MAR").

MaltaFinance and Banking
Luke Hili
Luke Hili
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The Malta Financial Services Authority ("MFSA") has issued a circular on the 23 June 2022 focusing on share buy-back programmes under the Market Abuse Regulation ("MAR"). In its circular, the MFSA makes some interesting observations in relation to the status of share buy-backs locally, and also provides useful, best practice recommendations to the market.

Background

Given that issuers are likely to always be in possession of inside information, any share buy-back which they carry out will likely be caught by one of the market abuse prohibitions set out in MAR. However, in recognition of the fact that share buy-backs "can be legitimate for economic reasons" (Recital 11 of MAR) and important for the proper functioning of the capital markets, article 5 of MAR establishes a safe harbour for share buy backs by creating a framework within which issuers can buy back their own shares, while enjoying immunity from the general prohibitions of insider dealing,

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