The Capital Markets Board has introduced significant changes to support the efficient functioning of capital markets and enhance companies' ability to adapt to market conditions.
Companies whose shares are traded on the stock exchange and their affiliates will now be able to initiate a share buyback program through a board of directors' decision. Previously, share buyback programs required a general assembly resolution; however, under the new regulation, companies only need to inform shareholders at the first general assembly meeting.
The board of directors' resolution must outline the purpose of the buyback, its duration, the maximum number of shares to be repurchased, and the maximum amount of funds to be allocated. This resolution must be publicly disclosed in accordance with material event disclosure requirements. Existing buyback programs may continue without requiring an additional board resolution.
Amendments to Communiqué No. II 22.1 on Repurchased Shares
Increase in Share Buyback Limits
Previously, the total number of shares eligible for repurchase was limited to 10% of the company's capital. Under the new resolution, this nominal value limit has been removed, enabling companies to execute broader share buybacks in line with their needs.
Removal of Daily Trading Limit
Previously, the number of shares eligible for repurchase was limited to 25% of the average trading volume over the last 20 days. Under the new resolution, this restriction has been lifted, allowing companies greater flexibility in executing share buybacks.
Removal of Disclosure Requirements
Disclosure requirements related to share buyback processes have been eliminated. Previously, share buyback programs had to be publicly announced at least three weeks before the general assembly, published on the company's website, and supplemented with additional disclosures two business days before the buyback commenced. Under the new resolution, these obligations will no longer apply, enabling companies to execute buyback processes more efficiently and seamlessly.
Share Buybacks Allowed During Capital Increase Processes
Restrictions on share buybacks during capital increase processes have been eased. Under the previous regulation, share buybacks were prohibited during capital increases. With the new regulation, this restriction now applies only to cash capital increases. Companies will now be able to conduct share buybacks during capital increase processes, provided they comply with the applicable rules.
Removal of Time Restrictions on Disposal of Repurchased Shares
Previously, shares repurchased in violation of the Communiqué provisions were required to be disposed of within one year or canceled through a capital reduction. Under the new resolution, this obligation will no longer apply.
Sales Restriction Imposed on Repurchased Shares
Under the new resolution, repurchased shares cannot be sold for the first 30 days. The "first-in, first-out" method will be applied in calculating this period. After 30 days, the shares may be disposed of within a maximum of three years or retained in accordance with the limitations set forth in the Communiqué
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