Practical guide to share buybacks for companies on growth markets

On 5 December 2026, Swedish public limited companies whose shares are admitted to trading on a multilateral trading facility (MTF) will be able to acquire and transfer their own shares. For MTF companies wishing to use the new rules, the next steps are to plan general meeting resolutions, assess the capital available and establish trading procedures. Here, we address the practical issues, from the initial board discussion to the handling of the repurchased shares.

In our previous article, "Acquisition and transfer of own shares by MTF companies: a new legal framework for greater flexibility", published on 4 November 2025, we outlined the background to the legislative proposal under consideration at the time. This article focuses on how companies and their boards can prepare and implement a buyback programme.

Are buybacks the right tool for the company?

What should the board consider before a proposal is prepared?

Start with three questions:

• Why should the company repurchase shares? For example, to return surplus capital to shareholders, secure the delivery of shares under an incentive programme or use shares as consideration for a future company acquisition.
   
• How much capital can be spared? The assessment needs to cover planned investments, working capital, financing needs, a reasonable liquidity reserve and the repurchase in light of the applicable capital protection rules.
   
• Can the programme be implemented in practice? Low trading volumes in the shares may mean that a buyback takes considerably longer time than planned.

The purpose should be documented early on. It affects not only communication with shareholders, but also which regulatory framework can be used for trading and the assessment of whether additional general meeting resolutions are needed.

Is it enough for the company to have money in the bank?

No. A buyback constitutes a transfer of value and must comply with the capital protection rules of the Swedish Companies Act. There must be full coverage for restricted equity, and the repurchase must be justifiable in view of, among other things, the risks associated with the company’s operations, its consolidation requirements and liquidity (and the corresponding factors for the group if the company is a parent company).

For a growth company, the board should specifically consider what would happen if, for example, a substantial customer payment were delayed or the next funding round were postponed. Based on such a liquidity scenario, the board should assess, in light of the capital protection rules, how much liquidity the company can spare for buybacks.

How many shares may the company repurchase?

The buyback must not result in the company holding more than ten per cent of all shares in the company.

The limit applies to the holding at any given time, not to the total number of shares that may be purchased during a calendar year.

What do buybacks cost?

The shares are acquired at market value, and transaction costs relating to trading and administration will arise.

Next: get the resolutions and documentation in place

Does the company need to wait until the 2027 annual general meeting?

Not necessarily. Resolutions may also be passed at an extraordinary general meeting, provided that the company has a distributable amount available according to the most recently adopted balance sheet and in accordance with other capital protection regulations. However, resolutions under the new rules may only be passed at meetings held on or after 5 December 2026. This also applies to buyback authorisations.

For a company that does not need to start buybacks immediately, the 2027 annual general meeting will be a natural opportunity. A company wishing to start earlier needs to plan for an extraordinary general meeting to be held no earlier than 5 December 2026.

Should the general meeting resolve on the buyback or authorise the board?

Both options are possible. An authorisation allows the board to adjust the timing and scale of the buybacks to the company’s financial position and market conditions. It does not impose any obligation to carry out buybacks.

A buyback authorisation must specify, among other things:

• how the acquisitions may be made,
• the period before the next annual general meeting during which it may be exercised,
• the maximum number of shares that may be acquired,
• the minimum and maximum price.

The general meeting resolution requires the support of at least two thirds of both the votes cast and the shares represented at the meeting. Registration with the Swedish Companies Registration Office, as required for an authorisation to issue shares, is not required.

Which documents need to be prepared?

If the board is to be granted an authorisation, plan the documentation in two stages: first, ahead of the general meeting, and then when the board is to exercise the authorisation. The following documents need to be prepared ahead of the general meeting:

1. A proposed resolution or authorisation setting out the conditions prescribed by the Swedish Companies Act and complying with the applicable disclosure requirements in the trading venue’s rulebook.

2. The board’s reasoned opinion on whether the buyback is justifiable under Chapter 17, Section 3, second and third paragraphs, of the Swedish Companies Act.

3. If the annual report is not considered at the general meeting, the proposal must be supplemented with information on how much of the distributable amount under Chapter 17, Section 3 of the Swedish Companies Act remains after the most recent resolution on a value transfer, based on the most recently adopted balance sheet. The prescribed supplementary documents must also be made available, including the latest annual report and audit report, a board report on events of material significance after the annual report was issued, including information on changes in restricted equity after the balance sheet date, and an auditor’s opinion on the board report.

When the board exercises the authorisation, it must prepare a new reasoned opinion on whether the buyback is justifiable and state the amount available for a value transfer. The accounting documentation, an updated board report and an auditor’s opinion required by the Swedish Companies Act must also be available.

A common pitfall is to treat the general meeting’s authorisation as an unconditional go-ahead to trade. The board needs to make an updated assessment when the authorisation is exercised. The auditor should be involved from the outset in planning the timetable for the buybacks.

Before the first acqusition: decide how trading will be managed

What does safe harbour mean, and does the company need to apply the rules?

The safe harbour under Article 5 of the Market Abuse Regulation (“MAR”) and Commission Delegated Regulation (EU) 2016/1052 provides specific protection from the prohibitions on insider dealing and market manipulation for trading under a buyback programme that meets all applicable conditions. Use of this protection is voluntary. The programme’s sole purpose must be to reduce the share capital, meet obligations arising from convertible debt instruments or meet obligations under share option programmes or other allocations of shares to employees or members of the administrative, management or supervisory bodies of the issuer or an associated company.

The safe harbour therefore cannot apply to buybacks where, for example, the shares are intended to be used as consideration in company acquisitions. In such cases, companies must comply with the trading prohibitions under MAR in connection with company acquisitions.

How do low trading volumes in the shares affect the programme?

For many MTF companies, trading volume will be a greater constraint than the ten per cent limit.

As a general rule, the company may not purchase more than 25 per cent of the average daily trading volume calculated in accordance with the rules. Moreover, price limits apply. The company should also assess how the buybacks affect its ability to meet the trading venue’s share distribution requirements.

Example: If the relevant average daily trading volume is 8,000 shares, the normal daily volume limit will be 2,000 shares. A programme covering 200,000 shares would therefore require at least 100 trading days if the volume used as the basis for the calculation remains unchanged. In practice, it may take longer, as purchases cannot always be made within the programme’s price limits and other conditions.

Can the company purchase a larger holding directly from a shareholder?

The new rules do not generally confer a right to carry out selective buybacks outside the trading venue, as this requires, among other things, compliance with the principle of equal treatment and the other provisions of the Companies Act. Acquisitions may be made on a permitted trading venue or through an offer to all shareholders or all holders of a particular class of shares.

What should the mandate to the bank or investment firm include?

There is no general requirement to have a bank administer the entire programme. In practice, however, the company needs a party that can execute transactions on the trading venue. If the company wishes to be able to continue buybacks during periods when specific trading restrictions apply, the programme needs to be structured so that an applicable exemption under MAR can be used. This may, for example, be a time-scheduled programme or a programme in which an investment firm or credit institution makes trading decisions autonomously and independently of the company. Having a bank execute the transactions is hence not sufficient in itself, and the exemptions do not confer any general right to trade when the company has inside information.

The mandate should clarify at least:

• the maximum budget and maximum number of shares,
• price and volume limits,
• the duration of the programme,
• who makes the individual trading decisions,
• how trading data is provided to the company,
• who is responsible for each reporting step,
• when and how trading can be suspended.

During the programme: disclosure and reporting

What happens if inside information arises within the company?

This issue should be resolved before the trading begins.

The company must not decide to launch a buyback programme when it has access to inside information. If inside information arises during an ongoing programme, the company needs to assess whether trading should be suspended or may continue under an applicable exemption. The assessment depends on the structure of the programme, the conditions in MAR and the safe harbour rules.

The company should therefore have a clear internal line of communication between the function that assesses inside information and the function responsible for the buyback programme, regardless of whether the safe harbour is applied.

What needs to be disclosed and reported?

1. Proposals and resolutions: information on the proposal to the general meeting (including the purpose of the programme, the maximum buyback amount, the maximum number of shares that may be acquired and the duration of the programme), the general meeting’s resolution (general meeting bulletin) and, where an authorisation has been granted, the board’s resolution to exercise the authorisation and to launch the buyback programme.
2. Completed transactions: all acquisitions and transfers of the company’s own shares must be reported to the trading venue no later than seven (7) trading days after the date of acquisition. If the safe harbour exemption is applied, the company must disclose completed buybacks on a weekly basis, and it is also recommended that the completion of a programme be announced. In addition, where the safe harbour exemption is applied, the company must publish the disclosed transactions on its website and keep this information available to the public for at least five years from the date of disclosure.
    

Before launching the programme, the company should check the trading venue’s current issuer rules and reporting instructions, even if the programme is intended to meet the safe harbour conditions. The company’s adviser under the trading venue’s rules should be involved early on, for example the Certified Adviser for companies listed on First North companies or the Mentor for companies listed on NGM Growth Market. The companies should also appoint someone internally to be responsible for monitoring trading data and reporting deadlines.

After the buyback: using the shares

What rules apply to the shares while the company holds them?

Own shares do not carry any entitlement to dividends and may not be represented at a general meeting.

Can the repurchased shares be used immediately?

Not necessarily. The buyback and the subsequent use of the shares are separate matters, and the actual use of the shares often requires a separate general meeting resolution.

It is therefore advisable to plan the final step while preparing the buyback and to submit any additional proposed resolutions to the same general meeting. A buyback authorisation does not in itself authorise the subsequent transfer of the shares.

What additional general meeting resolutions may be needed before the shares are used after the buyback?

The following are examples of uses for repurchased own shares and the additional resolutions that may be needed.

• Cancellation of the shares: If the repurchased shares are to be cancelled, a separate general meeting resolution to reduce the share capital is required. Own shares do not carry any entitlement to dividends while they are held by the company, including before cancellation. If the total dividend amount remains unchanged, a buyback may therefore result in the dividend being distributed among fewer shares entitled to dividends.
   
• Incentive schemes: Own shares may be used to fulfil the company’s obligations under an incentive programme. The transfer is subject to the so-called Leo rules in Chapter 16 of the Swedish Companies Act. A specific general meeting resolution supported by at least nine tenths of both the votes cast and the shares represented at the meeting is therefore required to approve such a transfer. Using repurchased shares for delivery to participants in the company’s incentive scheme also avoids dilution for existing shareholders.
   
• Acquisition consideration: If own shares are to be used as consideration for a company acquisition, the company needs to plan for the separate resolution or authorisation required for the transfer.
   

A well-prepared buyback programme gives the board flexibility. It requires not only an authorisation, but also that the company knows when the tool should be used, how trading should be carried out and when it should be cancelled.

DLA Piper assists companies and boards with the planning, resolutions and implementation of acquisitions and transfers of own shares.