The new rules will see companies disclose all the critical information, including the risks and pricing of the share repurchase.
“The draft guidelines provide additional requirements for share buyback transactions by listed companies, including disclosures, approval requirements and timelines,” said the CMA.
Share buybacks are common in the West where they are ideally implemented when companies believe their stock is trading at a major discount.
Share repurchases have also been controversial, with some companies implementing ill-timed trades to help executives cash in stock options.
The repurchases reduce the volume of outstanding shares as some investors sell holdings to the company, with those remaining having a greater claim on the firm’s assets and future cash flows on their enlarged stake.
