RE:NCIB Purchases - My Takeways Good morning Carena.
Great summary.
You asked " Anyone know the specific rule?"
"Daily Limit for NCIB Purchases The TSX Company Manual also sets out a daily limit for purchases under an NCIB, that is, 25% of the listed issuer’s “average daily trading volume” (“ADTV”), in effect, the average daily number of shares of the issuer traded on TSX during the six months prior to acceptance by TSX of the NCIB. For example, if a listed issuer’s ADTV is 100,000 shares, the TSX daily limit for purchases under an NCIB will be 25,000 shares.
Block Purchase Exception
There is an exception to the TSX daily limit under which a listed issuer may make one “block purchase” per calendar week which exceeds the daily limit. The TSX Company Manual defines “block” as a quantity of securities that either (i) has a purchase price of $200,000 or more, or (ii) is at least 5,000 securities and has a purchase price of at least $50,000, or (iii) is at least 20 board lots of the security and totals 150% or more of the ADTV for that security. For example, if the TSX daily limit is 25,000 shares and an issuer has repurchased 20,000 shares during a trading day, the issuer can make a “block purchase” from one seller of 100,000 additional shares for $1 million and thereby surpass the TSX daily limit of 25,000 shares. However, once the block purchase exception has been used, the listed issuer cannot make any further purchases under its NCIB for the remainder of that trading day and cannot use the “block purchase” exception again during that calendar week.
Detailed NCIB Rules
Section 629.(l) of the TSX Company Manual contains other detailed rules relating to NCIBs. Under these rules, a listed issuer cannot make any purchases pursuant to its NCIB at the opening or during the 30 minutes before the scheduled close of a trading session. Also, purchases made pursuant to an NCIB cannot be made at a price which is higher than the last independent trade of a board lot of the class of securities which is the subject of the NCIB. In other words, if the last independent trade was at $25, a purchase under the NCIB cannot be at a price greater than $25. As a result, an NCIB can be used to keep a stock price from falling, but cannot be used to push up the stock price."
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