Share repurchase regulations: do firms play by the rules?

Edith Ginglinger (1) , Jacques Hamon (1)

1 DRM - Dauphine Recherches en Management

Open market share repurchases are strictly regulated to prevent companies from profiting from insider information. We examine compliance with these rules in France, where the mandatory disclosure of share repurchases provides detailed information on repurchases actually undertaken. Using a database containing 36,848 repurchases made by 352 French firms over the period 2000-2002, we show that very few firms fully comply with the regulations for all their buybacks. Non-compliance has an adverse effect on liquidity only for the smallest and least liquid firms.

Mots clés: open market share repurchases; insider trading; regulations; liquidity

Domaines: Gestion et management; Economies et finances

Edith Ginglinger, Jacques Hamon. Share repurchase regulations: do firms play by the rules?. International Review of Law and Economics, 2009, 29, pp.81-96. ⟨10.1016/j.irle.2008.12.002⟩. ⟨halshs-00143974⟩