Flexibilities Introduced for Buy-Backs

The CMB Bulletin dated 19.03.2025, introducing Principle Decision No. i-SPK.22.9, has significantly revamped the regulations surrounding share buybacks, offering publicly traded companies more flexibility in adapting to market conditions. Below is a summary of the key changes:

1. Share Buyback Program with Board Resolution

• Companies can now initiate a share buyback program through a board resolution rather than requiring a general assembly decision.

• The board resolution must specify:

  • The purpose of the buyback.

  • The maximum duration of the program.

  • The maximum number of shares to be repurchased.

  • The maximum amount of funds to be used.

• This resolution must be disclosed to the public per the CMB’s regulations on special situation disclosures.

• Companies with existing buyback programs can continue them under the new rules without requiring a new board resolution.

2. More Flexible Buyback Limits

• The previous restrictions on capital and trading volume have been removed.

• The nominal value limit (10% of capital) and the daily trading volume limit (25% of the average trading volume of the last 20 days) no longer apply.

3. Buyback and Sale Freedom in Capital Increases

• Previously: Companies were prohibited from conducting buybacks or selling shares once a general assembly decision (for companies under the main capital system) or a board decision (for companies under the registered capital system) was made for a capital increase until the process was completed.

• Now: This prohibition only applies to cash injections, allowing companies to buy back or sell shares during other types of capital increases.

4. Non-application of Restrictions

• Article 12 of the Communiqué:

  • Previously, companies had to disclose the buyback program at least three weeks before the general assembly meeting.

  • Now, this disclosure is not required before the implementation of the buyback program, though subsequent disclosure obligations remain in place (such as after modifications to the program).

• Article 19 of the Communiqué:

  • Previously, repurchased shares had to be disposed of within one year, or they would need to be canceled via capital reduction if not sold.

  • Now, these obligations have been removed.

5. Restrictions on the Sale of Repurchased Shares

• Repurchased shares cannot be sold for 30 days from the acquisition date.

• The "first in, first out" method will be used to calculate the sale period.

• After the 30-day period, the shares must be disposed of within three years or held in accordance with applicable regulations.

6. Ongoing Monitoring by the CMB

• The CMB is closely monitoring market dynamics, and these regulations will remain in effect until further notice.

This decision is aimed at improving flexibility, efficiency, and transparency in the share buyback process, benefiting both companies and investors.

For any further information on amendments introduced, please contact the Durukan+Partners team.