Issuers are only allowed to purchase their own shares for certain purposes.
These include, among others:
- avoidance of severe, imminent damage
- free acquisition/purchase commission
- universal legal succession
- implementation of employee stock programmes
- compensation of minority shareholders
- lowering of share capital
- securities trading at credit institutions
- no special purpose (not for trading in treasury shares)
The relevant provisions under corporate law can be found (in German) in Article 65 para. 1 nos. 1 to 8 of the Stock Corporation Act (AktG; Aktiengesetz).
Stock exchange-listed companies, are required to publish the resolution of general meeting in relation to the repurchasing of shares pursuant to Article 65 para. 1a AktG.
The purchasing of shares by third parties on the account of the company is considered to be comparable to a purchase by the company itself. Consequently, pursuant to Article 66 AktG it is intended to prevent the circumventing of the regulations for the acquisition of one’s own shares.
Safe Harbour Provision
The safe harbour provision rules that buy-back programme for specific purposes and price stabilisation measures do not fall within the activity of market abuse. This rule can be found in Commission Delegated Regulation (EU) 2016/1052 for the conditions applicable to buy-back programmes and stabilisation measures of 8 March 2016.
Share buy-back programmes do not constitute the activity of market abuse, when they are conducted in accordance with the conditions of Article 5 of Regulation (EU) No 596/2014 (MAR) and may be conducts for the following purposes:
- Capital reductions
- Conversion of debt instruments into equity instruments
- Employee-share schemes
Disclosure of share buy-back programmes
Every issuer of shares, that are authorised for official trading and over-the-counter trading, must satisfy the disclosure obligations pursuant to Article 119 para. 9 BörseG 2018 with regard to share buy-backs. This provision was clarified by the Regulation of the Federal Ministry of Finance on the content and form of disclosures in relation with the buying-back and/or selling of own shares as well as the exercising of share options (Disclosure Regulation 2018 (VeröffentlichungsV 2018; Veröffentlichungsverordnung 2018)).
In the case of share buy-back programmes in accordance with Article 65 para. 1 nos. 4, 6 and 8 AktG the following items shall be required to be disclosed:
- the authorising resolution adopted by the general meeting
- the planned execution
- the resolution of the management board
- the resulting buy-back programme (in particular its duration)
- the executed transactions
- any changes to the buy-back programme
- the end of the buy-back programme
This list is not exhaustive.
The transactions executed at the stock exchange and on an over-the-counter basis must be disclosed in the form of weekly transaction reports. This information must be reported to the FMA and the Vienna Stock Exchange and shall be published (in some cases on the Internet).