Regulatory Alerts2012-03-22
Share Buyback by Banking Corporations
The Supervisor of Banks issued this directive to regulate share buybacks by banking corporations, permitting such purchases under strict conditions to address capital surpluses while maintaining regulatory compliance. The regulation mandates that buyback plans must not exceed 3 percent of issued share capital, require prior supervisory approval, and adhere to the Israel Securities Authority's safe harbor mechanism to prevent insider trading. Additionally, the directive prohibits extending financing for share purchases, with narrow exceptions for collateral limits and employee purchase plans, ensuring that capital adequacy and leverage ratios remain unaffected.
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