The Law and Finance of Share Repurchases in Europe

Journal of Corporate Law Studies, Vol. 12, pp. 33-57, 2012

23 Pages Posted: 10 Apr 2012 Last revised: 10 Feb 2014

Mathias M. Siems

Durham University - Durham Law School; University of Cambridge - Centre for Business Research

Amedeo De Cesari

University of Manchester - Alliance Manchester Business School - Finance & Accounting Group

Date Written: April 10, 2012

Abstract

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

Keywords: market manipulation, share repurchases, share buy-backs, dividends, law and finance, market abuse directive, securities regulation

JEL Classification: G35, G38, K22, K42, N24, N44

Suggested Citation

Siems, Mathias M. and De Cesari, Amedeo, The Law and Finance of Share Repurchases in Europe (April 10, 2012). Journal of Corporate Law Studies, Vol. 12, pp. 33-57, 2012. Available at SSRN: https://ssrn.com/abstract=2037711

Mathias M. Siems (Contact Author)

Durham University - Durham Law School ( email )

Stockton Road
Durham, County Durham DH1 3LE
United Kingdom

HOME PAGE: http://www.dur.ac.uk/mathias.siems

University of Cambridge - Centre for Business Research ( email )

Top Floor, Judge Business School Building
Trumpington Street
Cambridge, CB2 1AG
United Kingdom

HOME PAGE: http://www.cbr.cam.ac.uk/people/research-associates/mathias-m-siems/

Amedeo De Cesari

University of Manchester - Alliance Manchester Business School - Finance & Accounting Group ( email )

Crawford House
Booth Street East
Manchester, M15 6PB
United Kingdom
+44 (0) 161 2754298 (Phone)

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