23.12.2003 Official Journal of the European Union L 336/33 COMMISSION REGULATION (EC) No 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buy-back programmes and stabilisation of financial instruments (Text with EEA relevance) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Directive 2003/6/EC of the European Parlia- ment and the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) ('), and in particular Article 8 thereof, After consulting the Committee of European Securities Regula- tors (CESR) (%) for technical advice, Whereas: 1 () OJ L 96, 12.4.2003,5. 16. () CESR was established b 191,13.7.2001, p. 43). Article 8 of Directive 2003/6/EC provides that the prohi- bitions provided therein shall not apply to trading in own shares in ‘buy back’ programmes or to the stabilisa- tion of a financial instrument, provided such trading is carried out in accordance with implementing measures adopted to that effect. Activities of trading in own shares in ‘buy-back’ programmes and of stabilisation of a financial instru- ment which would not benefit from the exemption of the prohibitions of Directive 2003/6/EC as provided for by Article 8 thereof, should not in themselves be deemed to constitute market abuse. On the other hand, the exemptions created by this Regu- lation only cover behaviour directly related to the purpose of the buy-back and stabilisation activities. Behaviour which is not directly related to the purpose of the buy-back and stabilisation activities shall therefore be considered as any other action covered by Directive 2003/6/EC and may be the object of administrative measures or sanctions, if the competent authority estab- lishes that the action in question constitutes market abuse. As regards trading in own shares in ‘buy-back’ programmes, the rules provided for by this Regulation are without prejudice to the application of Council Directive 77[91/EEC on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public y Commission Decision 2001/527/EC (O] L limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent (%). Allowable ‘buy back’ activities in order to benefit from the exemption of the prohibitions of Directive 2003/6/ EC include issuers needing the possibility to reduce their capital, to meet obligations arising from debt financial instruments exchangeable into equity instruments, and to meet obligations arising from allocations of shares to employees. Transparency is a prerequisite for prevention of market abuse. To this end Member States may officially appoint mechanisms to be used for public disclosure of informa- tion required to be publicly disclosed under this Regu- lation. Issuers having adopted ‘buy-back’ programmes shall inform their competent authority and, wherever required, the public. Trading in own shares in ‘buy-back’ programmes may be carried out through derivative financial instruments. In order to prevent market abuse, the daily volume of trading in own shares in ‘buy-back’ programmes shall be limited. However, some flexibility is necessary in order to respond to given market conditions such as a low level of transactions. Particular attention has to be paid to the selling of own shares during the life of a ‘buy-back’ programme, to the possible existence of closed periods within issuers during which transactions are prohibited and to the fact that an issuer may have legitimate reasons to delay public disclo- sure of inside information. Stabilisation transactions mainly have the effect of providing support for the price of an offering of relevant securities during a limited time period if they come under selling pressure, thus alleviating sales pressure generated by short term investors and maintaining an orderly market in the relevant securities. This is in the interest of those investors having subscribed or purchased those relevant securities in the context of a significant distribution, and of issuers. In this way, stabi- lisation can contribute to greater confidence of investors and issuers in the financial markets. () O L 26, 31.1.1977, p. 1.