The Law and Finance of Share Repurchases in Europe
Mathias M. Siems
Durham University - Durham Law School; University of Cambridge - Centre for Business Research
Amedeo De Cesari
Aston University - Aston Business School - Finance & Accounting Group
April 10, 2012
Journal of Corporate Law Studies, Vol. 12, pp. 33-57, 2012
This paper analyses the impact of the EU market abuse law on share repurchases. We find that the Member States’ previous rules differed considerably, and therefore it can be said that the Regulation on share repurchases has provided uniformity as to the availability of a safe harbor for share repurchases. The picture, however, gets more difficult to assess if we consider our findings on the actual effect of the law. Our results do not confirm a 'simple law and finance story' according to which market participants would have just reacted as expected by the new legal rules. Rather, it seems to be the case that the value of legal certainty and the positive signal of common legal rules have also had an impact on the propensity to repurchase own stock.
The Supplement for this paper is available at the following URL: http://ssrn.com/abstract=1950153
Number of Pages in PDF File: 23
Keywords: market manipulation, share repurchases, share buy-backs, dividends, law and finance, market abuse directive, securities regulation
JEL Classification: G35, G38, K22, K42, N24, N44Accepted Paper Series
Date posted: April 10, 2012 ; Last revised: February 10, 2014
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